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
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