NDLI: Infrastructure Leasing and Financial Services Ltd Vs. Hdfc Bank Ltd. & Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Transfer of Property Act 1882
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Issue for consideration: Whether the documents executed by the borrower-appellant by which rents were made over to the lender-respondent constituted an assignment and thus fell outside the scope of an asset and security freeze order made by the NCLAT. Transfer of Property Act, 1882 – Assignment of receivables – Sanction of financial facility of ₹400 crores to the borrower by the lender – Parties entered into Master Facility Agreement- MFA and Assignment Agreement-AA – As per MFA receivables or rents which borrower is entitled to, form the security for the advance extended to it by the lender and under AA the rents payable to borrower stood unconditionally assigned to the lender – Thereafter, an asset and security freeze order of the borrower by the NCLAT – Subsequently, NCLAT held that the said freeze order did not negate the AA nor did it take away the property right of the lender in the lease rental receivables – Execution of documents by the borrower by which rents were made over to the lender, if constituted an assignment and thus fell outside the scope of an asset and security freeze order made by the NCLAT: Held: Nature and the substance of the transaction is determinative – Application of the rule that all the contemporaneous documents are to be read together, to discern the true purport of the contract, it is evident that what the parties intended was the assignment of the debt-rents payable – There can be a transfer of debts, which are defined as actionable claims – Rents payable by borrower- tenants, lessees and licensees are debts, which stood transferred to the creditor Bank – Reference to pledge, in some places in the documents, did not undermine the fact that the rents payable to and receivable by the borrower stood absolutely assigned to the lender – Thus, the NCLAT’s conclusions are correct. [Para 28, 31, 39] Deeds and document – Interpretation of – Principle of contract interpretation: Held: Substance of a document, is discernible from its terms, rather than the label or its nomenclature – One document is styled or described in a certain manner, or that it uses a certain expression, or term is not conclusive; it is the effect of all the terms of the documents, which bring out the true purport and intention of the parties – Also where the transaction is not the subject of one document, but several, which refer to each other, or reading of all, describe the entire contract, then, it is open to the court to consider all of them together. [Para 26, 27] Transfer of Property Act, 1882 – s.3 – Expression ‘actionable claim’ – Meaning of: Held: Is claim to an unsecured debt other than a debt secured by mortgage of immovable property, or hypothecation or pledge, or beneficial interest in a movable property – Both these are recognised as enforceable – Other claims do not fall within the expression “actionable claim”. [Para 33]
Judge	Hon'ble Mr. Justice S. Ravindra Bhat
Neutral Citation	2023 INSC 929
Petitioner	Infrastructure Leasing And Financial Services Ltd
Respondent	Hdfc Bank Ltd. & Anr.
SCR	[2023] 14 S.C.R. 1033
Judgement Date	2023-10-19
Case Number	4708

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