A promoter has no right to challenge voting rights

National Company Law Appellate Tribunal: In a recent order passed by S.J. Mukhopadhaya, Chairperson and Bansi Lal Bhagat J., Member  regarding the appeal of the petitioner, who claims to be a promoter, regarding excessive voting rights given to L&T Finance (Financial Creditor).

The brief facts being that the National Company Law Tribunal (NCLT) had directed the Resolution Professional to grant proportionate rights to L&T, which had been challenged here in this case by the appellant regarding the rights granted not to be just and proper.

It was held by this Tribunal, that the appellant, who was found to be a promoter/director of the corporate debtor, had no locus standi to challenge the voting rights of any financial creditor. It was also held that with respect to Section 29-A of the Insolvency and Bankruptcy Code, 2016, that the appellant was not a ‘connected person’ to file the case. Hence, no relief was granted and the appeal was dismissed, since the Tribunal found no merit in the present appeal. [Gurdeep Singh Sahani v. Berger Paints India Limited, 2017 SCC OnLine NCLAT 437, decided on 30-11-2017]

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