# In the matter of Sarga Hotel Pvt. Ltd.

> NCLT judgment dated 2023-11-30. Citation: TCN-2023-NCLT-00498. Rishima SA Investments LLC (Mauritius) filed an application under Section 60(5) of the…

- **Court:** NCLT
- **Order date:** 30 Nov 2023
- **Citation:** TCN-2023-NCLT-00498
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sarga-hotel-pvt-ltd-9aa57558

## Summary

### Background

Rishima SA Investments LLC (Mauritius) filed an application under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) challenging the rejection of its claim by the Resolution Professional (RP) of Sarga Hotel Pvt Ltd (Corporate Debtor). Rishima sought directions from the Adjudicating Authority to allow its claim of Rs. 1,32,89,75,268.00 as a financial debt or, alternatively, as 'other debts', and to allow it to participate in the Committee of Creditors (CoC) meetings. The claim stemmed from foreign arbitral awards related to a breach of a Share Subscription and Shareholders Agreement (SSHA) where SIDCL and the Corporate Debtor failed to purchase Rishima's shareholding at an agreed price.

## Facts

Rishima SA Investments LLC (Mauritius) invested Rs. 80 Crore to acquire 35% shareholding in Sarga Hotel Pvt Ltd (Corporate Debtor). A Share Subscription and Shareholders Agreement (SSHA) was made between Rishima, SIDCL, and the Corporate Debtor. According to the SSHA, SIDCL/Corporate Debtor was obliged to purchase Rishima's shareholding at a price equivalent to the invested amount plus a 25% per annum return (IRR). SIDCL and the Corporate Debtor failed to purchase the shareholding, leading to a breach of the SSHA. Rishima initiated arbitration under the Singapore Arbitration Act 2001, resulting in foreign arbitral awards directing SIDCL and the Corporate Debtor to pay Rs. 132,39,33,646/- plus legal costs. Rishima filed Form C with the Resolution Professional (RP) of

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## Issues and analysis

### Issue 1: Whether the claim made by the Applicant would …

**Ratio:** Section 5(8) of the IBC defines "financial debt" as a debt disbursed against

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**Reasoning:** The NCLT reasoned that at no point in time did the applicant give any loan or make any

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) requires a direct

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**Application:** The NCLT applied the definition of 'financial debt' to the facts and found that

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## Parties

- **Judges:** BIDISHA BA…; ARVIND DEVA…
- **Appellants:** Rishima SA…
- **Respondents:** SARGA HOTELS PVT.…; Avishek…

## Timeline

- **2019-04-30 — Partial Awa…**: Partial award date of…
- **2019-05-30 — Delhi High Court…**: Delhi High Court's interim order…

## 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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