# In the matter of Gemini Communication Limited MA-398-2018 In CP-699-IB-2017

> NCLT judgment dated 2019-01-09. Citation: TCN-2019-NCLT-05286. The case involves an application filed by Merrill Lynch International seeking direction to the…

- **Court:** NCLT
- **Order date:** 9 Jan 2019
- **Citation:** TCN-2019-NCLT-05286
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gemini-communication-limited-ma-398-2018-in-cp-699-ib-2017-47ad6ae4

## Summary

### Background

The case involves an application filed by Merrill Lynch International seeking direction to the Resolution Professional to recognize their claim as a 'Financial Debt' under Section 5(8) of the Insolvency and Bankruptcy Code (I&B Code), 2016, and consequently, as a 'Financial Creditor' of Gemini Communication Limited, the Corporate Debtor undergoing CIRP. The applicant held Foreign Currency Convertible Bonds (FCCBs) issued by the Corporate Debtor. A dispute arose regarding the conversion of these FCCBs into equity shares, leading to a Civil Suit and a subsequent Memorandum of Compromise. The Committee of Creditors (CoC) rejected the Applicant's claim, leading to the present application before the NCLT.

## Facts

Merrill Lynch International held Foreign Currency Convertible Bonds (FCCBs) issued by Gemini Communication Limited. A Trust Deed was executed with the Bank of New York Mellon as Trustee. The FCCBs matured on 18.07.2012, with a conversion right exercisable by 18.06.2012. The Applicant did not exercise this right. On 01.11.2012, the Corporate Debtor allotted 19,746,885 Equity Shares to the Applicant without prior notice. The Applicant filed a Civil Suit challenging this. A Memorandum of Compromise was executed on 30.03.2017, agreeing to restore the Applicant as a FCCBs holder. The City Civil Court decreed the suit on 04.04.2017, but an error in the decree led to a Civil Revision Petition. The High Court of Madras allowed the revision on 07.03.2018. The Applicant filed

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## Issues and analysis

### Issue 1: Whether Merrill Lynch International should be recognized as a 'Financial Creditor' of Gemini …

**Ratio:** Section 5(8) of the I&B Code defines 'financial debt' as a debt along with interest,

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**Reasoning:** The NCLT reasoned that the Applicant held FCCBs, which fall within the purview of the

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**Interpretation:** The interpretation of Section 5(8) is crucial in determining whether a

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**Application:** In this case, the NCLT applied the definition of 'financial debt' to the FCCBs

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Merrill Lynch…
- **Respondents:** Gemini Communicati…; Aishwarya Mohan…

## Timeline

- **2007-06-29 — Subscription A…**: Subscription Agreement entered into…
- **2007-07-16 — Trust Deed Ex…**: Trust Deed executed with the Bank…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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