# In the matter of Innoventive Ventures Ltd. vs. Mr. Trupal. J. Patel Liquidator of Innoventive Industries Ltd. Company Appeal (AT)(Ins) No 102-104 of 2021

> NCLAT judgment dated 2022-12-23. Citation: TCN-2022-NCLAT-00002. This case involves an appeal against two orders passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 23 Dec 2022
- **Citation:** TCN-2022-NCLAT-00002
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/innoventive-ventures-ltd-vs-mr-trupal-j-patel-liquidator-of-innoventive-industri-704e1a07

## Summary

### Background

This case involves an appeal against two orders passed by the National Company Law Tribunal (NCLT), Mumbai Bench, regarding a share pledge agreement. The appellant, Innoventive Ventures Limited (IVL), filed the appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, challenging the NCLT's decision to declare a share pledge agreement dated 25.11.2016 as a preferential transaction under Section 43 of the Code. The NCLT directed the appellant to release the impugned pledge created by the Corporate Debtor (CD) in respect of Innoventive Americas Inc (IAI/R2) shares and handover the share certificates to the Liquidator. The appellant also sought to recall the impugned order dated 29.10.2020, which was dismissed by the NCLT on 06.01.2021.

## Facts

Innoventive Ventures Limited (IVL) filed an appeal against the orders of the NCLT, Mumbai, which declared a share pledge agreement dated 25.11.2016 as a preferential transaction under Section 43 of the IBC. The Corporate Debtor (CD), Innoventive Industries Limited, availed working capital facilities from SBI and RBL in 2013. The Appellant had pledged its shares in Aim Filtertech Pvt. Ltd. and GeneOmbio Technologies Pvt. Ltd. in favor of SBI and Opal Luxury Time Products Ltd. with RBL to secure the CD's borrowings. In 2014, SBI and RBL invoked their respective pledges and sold some shares belonging to the Appellant. The CD then decided to pledge its shares held in R2 (Innoventive Americas Inc.) in favor of the Appellant. A share pledge agreement dated 10.06.2014 was

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## Issues and analysis

### Issue 1: Whether the share pledge agreement dated 25.11.2016 constitutes a preferential transaction under …

**Ratio:** Section 43 of the IBC defines preferential transactions. A transaction is considered

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**Reasoning:** The Adjudicating Authority concluded that the pledge agreement dated 25.11.2016 was a

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**Interpretation:** Section 43 aims to prevent debtors from favoring certain creditors or related

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**Application:** The court applied Section 43 to the facts, noting that the pledge was created

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## Parties

- **Judges:** Ashok Kumar…; Rakesh…
- **Appellants:** Innoventive…
- **Respondents:** Innoventive…; Trupal.J.…

## Timeline

- **2013-03-06 — SBI Cash Credit…**: SBI provided an additional cash credit facility…
- **2013-03-25 — RBL Cash Credit…**: RBL provided a cash credit facility of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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