# In the matter of Lanco Amarkantak Power Limited IA No.457-2020 in CP(IB) No. 420-7-HDB-2018

> NCLT judgment dated 2023-02-06. Citation: TCN-2023-NCLT-04761. The application was filed seeking to set aside the Resolution Professional's rejection of the…

- **Court:** NCLT
- **Order date:** 6 Feb 2023
- **Citation:** TCN-2023-NCLT-04761
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/lanco-amarkantak-power-limited-ia-no457-2020-in-cpib-no-420-7-hdb-2018-5a45b259

## Summary

### Background

The application was filed seeking to set aside the Resolution Professional's rejection of the petitioner's claim and the failure to include the petitioner in the Committee of Creditors. The Corporate Debtor, Lanco Amarkantak Power Limited, and Lanco Thermal Power Limited are subsidiary companies of LITL. Andhra Bank and Corporation Bank amalgamated with Union Bank of India. The Management Committee of the Board of Directors of Respondent No.1 accorded permission to create equitable mortgage with respect to the property in Dhandhani Village. The Corporate Debtor deposited the document of title on 12.11.2012.

## Facts

Union Bank of India (formerly Andhra Bank) filed an application against Lanco Amarkantak Power Limited. The Resolution Professional rejected the claim submitted by Union Bank of India, arguing that the debt was not a financial debt and that the financial statement of the Corporate Debtor did not reflect any liability. The bank had filed a claim in Lanco Infratech Limited. The Corporate Debtor and M/s. Lanco Thermal Power Limited are subsidiary companies of M/s. LITL. The holding Company was enjoying the credit facilities from the Petitioner. As per the Gazette Notification dated 04.03.2020, Andhra Bank and Corporation Bank have amalgamated with Union Bank of India. The Management Committee of the Board of Directors of Respondent No.1, vide its Resolutions dated

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## Issues and analysis

### Issue 1: Whether the Applicant Bank's claim qualifies as a financial debt under the provisions of the IB …

**Ratio:** A person having only security interest over the assets of the Corporate Debtor, even if

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**Reasoning:** The court relied on the Supreme Court's judgement in Anuj Jain, Interim Resolution

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**Interpretation:** The interpretation of Section 5 of the Code clarifies the distinction between a

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**Application:** The Applicant Bank, having extended credit facilities to the Group Companies of

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## Parties

- **Judges:** TELAPROLU…; SH. CHARAN…
- **Appellants:** Union Bank of…
- **Respondents:** Lanco Amarkantak…; Lanco Amarkantak…

## Timeline

- **2012-11-12 — Deposit of Title…**: The Corporate Debtor deposited the document of title with intent to secure the repayment…
- **2015-10-21 — Board Reso…**: The Management Committee of the Board of Directors of Respondent No.1 accorded permission…

## Legal provisions

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

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