The South Indian Bank Ltd. (Appellant), a scheduled commercial bank, extended credit facilities, including a Trade Receivables Discounting System (TReDS) facility, to RCI Industries and Technologies Limited (Corporate Debtor). The Corporate Debtor's account became a Non-Performing Asset, and a Corporate Insolvency Resolution Process (CIRP) was initiated. The Resolution Professional (RP) classified the TReDS claim of ₹17,92,08,473 as operational debt, while accepting a cash-credit facility claim as financial debt. The Appellant challenged this classification before the National Company Law Tribunal (NCLT), seeking reclassification of the TReDS claim as financial debt. The NCLT dismissed the application, citing a previous order (Mudraksh Investfin Pvt. Ltd. v. Brijesh
…The Reserve Bank of India issued guidelines on 02.07.2018 to set up the Trade Receivables Discounting System (TReDS).
TReDS allows MSMEs to convert trade receivables into cash through an electronic bidding platform where financiers discount invoices.
The Appellant/Bank signed a Master Financier Agreement with Mynd Solutions Pvt. Ltd on 07.04.2018.
Mynd Solutions hosts the TReDS platform, known as 'M1 Exchange'.
The Corporate Debtor registered on the M1 platform as a buyer and signed a Master Buyer's Agreement on 21.12.2018.
The Corporate Debtor's suppliers uploaded invoices on the M1 platform, which the Corporate Debtor confirmed.
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The Reserve Bank of India issued guidelines to…
The Appellant/Bank…
The South Indian Bank Ltd. (Appellant), a scheduled commercial bank, extended credit facilities, including a Trade Receivables Discounting System (TReDS) facility, to RCI Industries and Technologies Limited (Corporate Debtor). The Corporate Debtor's account became a Non-Performing Asset, and a Corporate Insolvency Resolution Process (CIRP) was initiated. The Resolution Professional (RP) classified the TReDS claim of ₹17,92,08,473 as operational debt, while accepting a cash-credit facility claim as financial debt. The Appellant challenged this classification before the National Company Law Tribunal (NCLT), seeking reclassification of the TReDS claim as financial debt. The NCLT dismissed the application, citing a previous order (Mudraksh Investfin Pvt. Ltd. v. Brijesh
…The Reserve Bank of India issued guidelines on 02.07.2018 to set up the Trade Receivables Discounting System (TReDS).
TReDS allows MSMEs to convert trade receivables into cash through an electronic bidding platform where financiers discount invoices.
The Appellant/Bank signed a Master Financier Agreement with Mynd Solutions Pvt. Ltd on 07.04.2018.
Mynd Solutions hosts the TReDS platform, known as 'M1 Exchange'.
The Corporate Debtor registered on the M1 platform as a buyer and signed a Master Buyer's Agreement on 21.12.2018.
The Corporate Debtor's suppliers uploaded invoices on the M1 platform, which the Corporate Debtor confirmed.
…The Reserve Bank of India issued guidelines to…
The Appellant/Bank…