# In the matter of Vistra ITCL (INDIA) Ltd. & Ors. vs. Dinkar Venkatasubramanian and Anr.

> SC judgment dated 2023-05-04. Citation: TCN-2023-SC-00076. This case involves a civil appeal filed in the Supreme Court of India against a judgment and order…

- **Court:** SC
- **Order date:** 4 May 2023
- **Citation:** TCN-2023-SC-00076
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/vistra-itcl-india-ltd-ors-vs-dinkar-venkatasubramanian-and-anr-394f778f

## Summary

### Background

This case involves a civil appeal filed in the Supreme Court of India against a judgment and order passed by the National Company Law Appellate Tribunal (NCLAT). The NCLAT had dismissed an appeal and confirmed an order passed by the NCLT, which had rejected the appellant's claim as a secured financial creditor in the corporate insolvency resolution process (CIRP) of Amtek Auto Limited. The appellant, Vistra ITCL (India) Ltd, claimed to be a secured creditor based on a pledge of shares of JMT Auto Ltd held by Amtek Auto Limited. The appellant had extended short-term loan facilities to group companies of Amtek Auto Limited, with the understanding that Amtek Auto Limited would create a first-ranking exclusive security by way of pledge over the shares. The appellant's

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## Facts

Amtek Auto Limited (Corporate Debtor) approached appellant nos. 2 and 3 for a short-term loan facility of INR 500 crores for its group companies, Brassco Engineers Ltd. and WLD Investments Pvt. Ltd., with the ultimate end use for the Corporate Debtor. The appellants understood that the Corporate Debtor would create a first-ranking exclusive security by pledging 16,82,06,100 equity shares of JMT Auto Ltd. A Security Trustee Agreement was executed between appellant no.1 and WLD for Rs.150,00,00,000 on 2015-12-28. The Corporate Debtor's board passed resolutions to create security over JMT Auto Ltd shares. IDBI Bank issued a NOC for the sale of assets up to INR 450,00,00,000 to settle dues under the Security Trustee Agreement. A Security Trustee Agreement was executed

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## Issues and analysis

### Issue 1: Whether the appellant, Vistra ITCL (India) Ltd, can be considered a financial creditor of the …

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

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**Reasoning:** The Court relied on previous decisions, including Anuj Jain (supra) and Phoenix ARC

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC is

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**Application:** In this case, the Court found that the appellant did not have a direct

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## Parties

- **Judges:** M.R.…; SANJIV K…
- **Appellants:** M/s. Vistra…
- **Respondents:** Amtek Auto…; DinkarVenkatasubra…

## Timeline

- **2015-12-28 — Security Trustee…**: Security Trustee Agreement was executed between the appellant no.1 and WLD for an amount…
- **2015-12-23 — Board Reso…**: Corporate Debtor's board of directors passed Board Resolutions whereby the board of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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