# In the matter of Spade Financial Services Limited & Anr. Vs. Hari Krishan Sharma & Ors. CA(AT)(Ins) No. 829 of 2019

> NCLAT judgment dated 2020-01-27. Citation: TCN-2020-NCLAT-00490. This case involves an appeal against an order passed by the National Company Law Tribunal…

- **Court:** NCLAT
- **Order date:** 27 Jan 2020
- **Citation:** TCN-2020-NCLAT-00490
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/spade-financial-services-limited-anr-vs-hari-krishan-sharma-ors-ca-1c99e630

## Summary

### Background

This case involves an appeal against an order passed by the National Company Law Tribunal (NCLT), New Delhi, which declared Spade Financial Services Limited and AAA Landmark Private Limited as related parties to the Corporate Debtor, AKME Projects Limited. The NCLT's decision arose from an application filed by Yes Bank Limited and Phoenix ARC Private Limited, financial creditors of AKME Projects Limited, seeking to exclude Spade and AAA Landmark from the Committee of Creditors (CoC). The Adjudicating Authority observed that the affairs of the Corporate Debtor and the Group of Arun Anand companies are deeply entangled and it is difficult for the Tribunal in a summary jurisdiction to unravel the same. The NCLT considered that the Corporate Debtor and Spade and AAA were

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## Facts

The Corporate Insolvency Resolution Process (CIRP) was initiated against AKME Projects Limited on 18th April 2018, following an application by the Operational Creditor, Hari Krishan Sharma. During the CIRP, Spade Financial Services Private Limited and AAA Landmark Private Limited filed claims as Financial Creditors. The Interim Resolution Professional (IRP) rejected these claims. Yes Bank Limited and Phoenix ARC Private Limited, also Financial Creditors, filed an application to declare Spade and AAA Landmark as related parties to AKME Projects Limited. Mr. Arun Anand, a director of both Spade and AAA Landmark, was previously associated with the Anil Nanda Group, which includes AKME Projects. Various agreements and transactions between 2010 and 2013 show a close

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## Issues and analysis

### Issue 1: Whether appellants Spade Financial Services Private Limited (Appellant No.1) and AAA Landmark …

**Ratio:** Section 5(24) of the Insolvency and Bankruptcy Code, 2016 defines 'related party' in

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**Reasoning:** The tribunal reasoned that Mr. Arun Anand, being a director of Spade and AAA Landmark and

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**Interpretation:** The interpretation of Section 5(24) focuses on the influence and control

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**Application:** The tribunal applied the definition of 'related party' to the facts of the

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## Parties

- **Judges:** A.I.S. C…; KanthiNar…; +1 more
- **Appellants:** Spade Financial…
- **Respondents:** AKME PROJECTS…; Hari Krishan…

## Timeline

- **2018-04-18 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP)…
- **2018-05-31 — Earlier Order by…**: Earlier order by the Adjudicating Authority,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(24) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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