# In the matter of JM Financial Asset Reconstruction Company Ltd. Vs Ask Trusteeship Services Pvt. Ltd. & Ors.

> NCLAT judgment dated 2024-05-09. Citation: TCN-2024-NCLAT-00451. The case involves two appeals filed against the same order dated 2024-04-22 passed by the…

- **Court:** NCLAT
- **Order date:** 9 May 2024
- **Citation:** TCN-2024-NCLAT-00451
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jm-financial-asset-reconstruction-company-ltd-vs-ask-trusteeship-services-pvt-lt-789f8783

## Summary

### Background

The case involves two appeals filed against the same order dated 2024-04-22 passed by the Adjudicating Authority (National Company Law Tribunal) New Delhi Bench, Court-II, which admitted a Section 7 application filed by ASK Trusteeship Services Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 912 of 2024 was filed by JM Financial Asset Reconstruction Company Ltd., claiming to be a financial creditor and assignee of Piramal. Company Appeal (AT) (Insolvency) No. 926 of 2024 was filed by the Suspended Director of the Corporate Debtor. The debt of ASK Trusteeship Services Pvt. Ltd. was allegedly subordinate to Piramal, and two Section 7 applications were filed by ASK Trusteeship Services Pvt. Ltd. The admitted Section 7 application was based on the debt and default of

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## Facts

Two appeals were filed against the order dated 2024-04-22 passed by the Adjudicating Authority admitting a Section 7 application filed by ASK Trusteeship Services Pvt. Ltd. JM Financial Asset Reconstruction Company Ltd. filed one appeal as a financial creditor and assignee of Piramal. The Suspended Director of the Corporate Debtor filed the other appeal. ASK Trusteeship Services Pvt. Ltd.'s debt was allegedly subordinate to Piramal's debt. ASK Trusteeship Services Pvt. Ltd. filed two Section 7 applications, with the admitted one based on Piramal's default. JM Financial Asset Reconstruction Company Ltd. also filed a Section 7 application. Other Section 7 applications by ASK Trusteeship Services Pvt. Ltd. and JM Financial Asset Reconstruction Company Ltd. were dismissed

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority rightly admitted the Section 7 application filed by ASK …

**Ratio:** The Adjudicating Authority has the power to admit Section 7 applications if the

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**Reasoning:** The court considers the submissions of both parties regarding the admissibility of the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate the CIRP against a

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**Application:** The court considers whether the debt and default to Piramal, now assigned to JM

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** JM Financial…
- **Respondents:** ASK Trusteeship…

## Timeline

- **2024-04-22 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal) New Delhi Bench, Court-II…
- **2024-05-09 — Appeals…**: Two Appeals have been filed…

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