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14. After hearing Learned Counsel for the parties, we have perused the record.

15. The following two issues are crop up in these Appeals.

(a) Whether the Application under Section 7 of I&B Code, filed pursuant to the RBI Circular dated 12.02.2018?

Comp. App. (AT) (Ins.) No. 1287 & 1291 of 2022

(b) Whether the liability of the Corporate Debtor stood discharged in view of the invocation of the pledged shares by the Financial Creditor.

18. According to the Appellants after invocation of the pledged shares the Financial Creditor became 95.2% shareholder of the Corporate Debtor and the entire dues of Corporate Debtor stood discharged. In support of this submissions Learned Counsel for the Appellants cited two Judgments one of this Appellate Tribunal in the case of PTC India Financial Services Ltd. (Supra) in which it is held that once shares are transferred to the Financial Creditor, the Financial Creditor became the owner of the shares. The another Judgment of Hon'ble High Court of Delhi in the case of Tendril Financial Services Pvt. Ltd. (Supra) in this Judgment it is held that as per the Regulation 58 of Security Exchange Board of India (Depositors and Participants) Regulations, 1996, the moment the shares are transferred to the Demat Account of the beneficiary after invocation of pledge shares, such transfer amounts to sale and transferee became the beneficial owner of the shares.

19. Learned Counsel for the Respondent No. 2 (Financial Creditor) submits that Regulation 58(8) of the Debentures Regulations is subject to the terms of Share Pledge Agreement and the pledge is governed by the Indian Contract Act.

20 In the present case the whole controversy arises when SBI CAP Trustee Company Ltd. issued a notice of Comp. App. (AT) (Ins.) No. 1287 & 1291 of 2022 invocation of pledge shares dated 20.12.2017. (Annexure 8 Page 240 of Reply of Respondent No. 2 (Financial Creditor)). In such a situation we are considering the effect of invocation of pledge shares.

26. In the light of the Judgement of Hon'ble High Court of Delhi in Tendril Financial Services Pvt. Ltd. (Supra). We are convinced with the arguments of Learned Counsel for the Appellants that the moment the shares transferred to the Demat Account of the SBI CAP Trustee Company Ltd. it became the beneficial owner of the shares as also held by this Appellate Tribunal in the case of PTC India Financial Services Ltd (Supra). Learned Counsel for the Appellants tried to impress that pursuant to invocation of pledged shares the Financial Creditor became the shareholder of the Corporate Debtor. We are unable to convince with this argument and held that after invocation of pledged shares the SBI CAP Trustee Company Ltd. became the shareholder of the Corporate Debtor, as per the Clause 2.6.2 of the Share Pledge Agreement dated 23.09.2016. The Financial Creditor is not party in the above referred agreement. In the notice dated 20.12.2017 it is mentioned that invocation of pledged shares shall not prejudice the rights and remedies available to the Financial Creditor under the Financing Documents. Therefore, it cannot be said that after invocation of the pledged shares by the SBI CAP Trustee Company Ltd., the Financial Creditor cannot maintain the Application under Section 7 of I&B Code, or the entire dues of the Corporate Debtor stood discharged.

Thus, the Appeals are hereby dismissed. No order as to costs.

(Emphasis Supplied) ➢ We note that the present appeal before us is squarely covered in the judgment of this Appellate Tribunal in the case of India Power (Supra) and the same has not been challenged before the Hon'ble Supreme Court of India, thus attained finality. We are duty bound to follow the same. ➢ We note that in the case of India Power (Supra), this Appellate Tribunal has categorically held that the Lenders (like Respondent No. 2 herein) have independent right to file Section 7 application, despite becoming shareholder due to events like invocation of pledged shares. ➢ Thus, it becomes clear that Lender have independent rights under the Code despite invocation of pledged shares which can make them shareholder of the Corporate Debtor.