SC interprets term ‘financial creditor’
Interpreting the definition of "financial creditor" in the Insolvency and Bankruptcy Code, the Supreme Court ruled on February 3 that pledge of shares did not amount to guarantee of disbursement of any amount against consideration. In the judgment, Phoenix Arc Ltd vs Ketulbhai Patel, L&T Financial lent an amount to Doshion Ltd. The latter gave an undertaking to L&T that it would not dispose of its holding in Gondwana Engineers Ltd so long as any amount was payable to L&T. Later, L&T assigned all its rights in the matter to Phoenix. The trouble started when Doshion defaulted and recovery action was launched. Bank of Baroda took the matter for IBC resolution and a resolution professional was appointed. He rejected the claim of Phoenix that it was a financial creditor. The NCLT, the appellate tribunal and the Supreme Court rejected its claim interpreting Section 5(8) of IBC. It rejected the argument of Phoenix that liability of the corporate debtor, who is surety, is coextensive with that of the debtor and the creditor has full right to pursue his liability against the surety even before the creditor.
Facebook will significantly reduce the distribution of content from profiles and pages run by the Myanmar military, treating it as a source of misinformation in the wake of the February 1 coup that deposed the elected government. Meanwhile, the United Nations Security Council should consider imposing punitive sanctions, arms embargoes and travel bans on Myanmar because of the military coup there, the UN human rights investigator for the Southeast Asian country said on Friday.