# In the matter of Motijug Agencies Limited

> NCLT judgment dated 2024-04-01. Citation: TCN-2024-NCLT-01910. The case involves two applications, I.A. (IB) No. 1582/KB/2023 and I.A. (IB) No. 1583/KB/2023,…

- **Court:** NCLT
- **Order date:** 1 Apr 2024
- **Citation:** TCN-2024-NCLT-01910
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/motijug-agencies-limited-de511268

## Summary

### Background

The case involves two applications, I.A. (IB) No. 1582/KB/2023 and I.A. (IB) No. 1583/KB/2023, filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the National Company Law Tribunal Rules, 2016. These applications are related to Company Petition (IB) No. 91/KB/2022 and Company Petition (IB) No. 94/KB/2022, respectively. The applications seek the substitution of CFM Asset Reconstruction Private Limited in place of Indian Bank, pursuant to a registered deed of assignment dated 14.08.2023.

## Facts

Indian Bank, the original financial creditor, initiated corporate insolvency resolution processes against Motijug Agencies Limited and Anirudh Kanoi. Subsequently, Indian Bank assigned its financial assets to CFM Asset Reconstruction Private Limited via a registered deed of assignment dated 14.08.2023. CFM Asset Reconstruction Private Limited then filed applications (I.A. (IB) No. 1582/KB/2023 and I.A. (IB) No. 1583/KB/2023) seeking to be substituted in place of Indian Bank in the ongoing Company Petition (IB) No. 91/KB/2022 and Company Petition (IB) No. 94/KB/2022. The corporate debtors opposed the substitution, arguing that the assignment agreement was invalid, that the assignee could only take over assets and not liabilities, and that the substitution would

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## Issues and analysis

### Issue 1: Whether the enforceability of an assignment …

**Ratio:** The validity or enforceability of an assignment cannot be judged on the touchstone of

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**Reasoning:** The NCLT relied on several judgments, including T. Johnson v. Phoenix ARC (P) Ltd., Lalan

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**Interpretation:** This means that the NCLT's role in a summary proceeding is not to delve into

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**Application:** In this specific case, the Corporate Debtor's argument regarding the inadequacy

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Indian…
- **Respondents:** Motijug Agencies…

## Timeline

- **2023-08-14 — Deed of Ass…**: Execution of a registered deed of assignment between Indian Bank (Assignor) and CFM Asset…
- **2024-04-01 — Order Pronou…**: Date of pronouncement of the order by the NCLT allowing the substitution of CFM Asset…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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