The Chennai-based two-wheeler maker had approached the Mumbai bench of the National Company Law Tribunal (NCLT) after the liquidator of Kalisma Steel rejected its claim as a financial creditor.
“The shares were supplied by the promoter in his official capacity to provide security for the loan” said the division bench of Justice PN Deshmukh and Shyam Babu Gautam in its order.
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“The submission of the respondent (liquidator) that the promoter pledged the shares in its personal capacity is not justified.”
Tvs Motors said the bankrupt company’s promoter had informed it about financial difficulties and would be able to continue its supply as a vendor only if the auto major can support it by giving an advance of Rs 2 crore.
The automaker had extended the said financial assistance at the agreed rate of annual 12% interest. Kalisma Steel agreed to repay the money in five trenches. Also, the promoters of Kalisma Steel had provided shares of Rs 2 crore as the security deposit.
The liquidator argued that the company’s claim as a secured creditor is incorrect since the underlying security is shares of the promoters which are not an asset of the company and those shares are pledged by the promoter of the Mumbai-based company in a personal capacity.
The tribunal rejected the liquidator’s arguments and clarified that TVS Motors stands in the position of a secured creditor in the liquidation of the company and directed the liquidator to consider the claim.
