The Supreme Court (SC) in Global Credit Capital Limited & Anr v. Sach Marketing Private Limited & Anr, 2024 SCC OnLine SC 649 upheld the judgment and order of the National Company Law Appellate Tribunal, New Delhi Bench (NCLAT), dated 07 October 2021 (Impugned Order) by which Sach Marketing Private Limited (Sach) was held to be a ‘financial creditor’ of Mount Shivalik Industries Limited, the corporate debtor, (CD) in corporate insolvency resolution proceedings under the provisions of the Insolvency & Bankruptcy Code, 2016 (IBC).

The National Company Law Appellate Tribunal (“NCLAT”) in Anjani Kumar Prashar v. Manab Datta & Ors, Company Appeal (AT) (Ins) No.

Introduction

Introduction and background 

The U.S. Court of Appeals for the Second Circuit recently held in Drawbridge Special Opportunities Fund LP v. Barnet (In re Barnet), 2013 BL 341634 (2d Cir. Dec. 11, 2013), that section 109(a) of the Bankruptcy Code, which requires a debtor "under this title" to have a domicile, a place of business, or property in the U.S., applies in cases under chapter 15 of the Bankruptcy Code.

Section 502(b)(6) of the Bankruptcy Code caps the amount of a lessor’s claim against a debtor-lessee for damages arising from the termination of a real property lease. The statutory cap is calculated according to a formula that considers, among other things, the date on which the lessor “repossessed” or the debtor-lessee “surrendered” the leased property. Because those terms are not defined in the Bankruptcy Code, however, courts disagree as to whether state or federal law should determine their meanings for the purpose of calculating the allowed amount of the lessor’s claims.