INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTDversusHDFC BANK LTD. & ANR.

                 [2023] 14 S.C.R. 1033 : 2023 INSC 929



                             CASE DETAILS

  INFRASTRUCTURE LEASING AND FINANCIAL SERVICES
                      LTD
                                      v.
                       HDFC BANK LTD. & ANR.
                    (Civil Appeal No(s). 4708 of 2022)
                           OCTOBER 19, 2023
       [S. RAVINDRA BHAT AND DIPANKAR DATTA, JJ.]
                              HEADNOTES
     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
                                    1033
1034          SUPREME COURT REPORTS                         [2023] 14 S.C.R.


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]
       LIST OF CITATIONS AND OTHER REFERENCES
      Yellapu Uma Maheswari and Ors. vs. Buddha Jagadheeswararao &
Ors 2015 [11] SCR 849; Assam Small Scale Ind. Dev. Corp. Ltd. & Ors.
v. J.D. Pharmaceuticals & Anr 2005 [4] Suppl. SCR 232; V. Lakshmanan
v. B.R. Mangalagiri & Ors 1994 Supp [6] SCR 561; Super Poly Fabriks
Ltd. vs. Commissioner of Central Excise, Punjab 2008 (6) SCR 1076; S.
Chattanatha Karayalar v The Central Bank of India & Ors 1965 [3] SCR
318; Mewa Lal and Ors. vs. Tara Rani AIR 1973 All 165 : 1973 [2] SCR
377; Sunrise Associates vs Govt. Of NCT of Delhi 2006 Supp(2) SCR 421;
Noor & Ors. v G.S. Ibrahim (Dead) by Lrs 2003 Supp [2] SCR 204; ICICI
Bank v Official Liquidator of APS Star Industries Ltd 2010 [12] SCR 644
– referred.
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1035
             v. HDFC BANK LTD. & ANR.


       OTHER CASE DETAILS INCLUDING IMPUGNED
              ORDER AND APPEARANCES
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4708 of 2022.
     From the Judgment and Order dated 13.05.2022 of the National
Company Law Appellate Tribunal, Principal Bench, New Delhi in I.A. No.
2196 of 2020 in Company Appeal (AT) No.346 of 2018.
     Appearances:
     Ramji Srinivasan, Sr. Adv., Kuber Dewan, Ms. Neeharika Aggarwal,
Kaustubh Srivastava, Ms. B. Vijayalakshmi Menon, Advs. for the Appellant.
      Mukul Rohtagi, Kapil Sibal, Nakul Diwan, Sr. Advs., Pranaya Goyal,
R. Sudhinder, Sandeep Singhi, Udit Mendiratta, Ms. Ekta Bhasin, Ms.
Aastha Trivedi, Nikhil Rohatgi, Shashank Khurana, Ashok Mathur, Advs.
for the Respondents.
       JUDGMENT / ORDER OF THE SUPREME COURT

                                 JUDGMENT

     S. RAVINDRA BHAT, J.
      1. This appeal1, is preferred by Infrastructure Leasing and Financial
Services Ltd (hereafter “IL&FS” or “the borrower”) aggrieved by an order
of the National Company Law Appellate Tribunal (hereafter, ‘NCLAT’)2.
The point in issue is whether the documents executed by IL&FS by which
rents were made over to the respondent, Housing Development Finance
Corporation Ltd (hereafter “HDFC” or “the lender”) constituted an
assignment and thus fell outside the scope of an asset and security freeze
order made by the NCLAT.
     2. IL&FS had approached the HDFC for financial assistance. By
Sanction Letter dated 22.06.2018, the lender sanctioned a financial facility
of ₹ 400 crores to the borrower. On 25.06.2018, a “Master Facility
Agreement” (“MFA”) was entered between IL&FS and HDFC for ₹ 400


1   Under Section 432, the Companies Act, 2013
2   Dated 13.5.2022 in IA 2196/2020 [in CoAp. (AT) No. 346/2018]
1036          SUPREME COURT REPORTS                       [2023] 14 S.C.R.


crores. The MFA envisioned the creation of a separate escrow account with
Housing Development Finance Corporation Bank Limited (hereinafter
‘Escrow Bank’) for opening of a separate escrow account with the Escrow
Bank. Along with MFA, an “Assignment Agreement” (hereafter “AA”)
dated 25.06.2018 was also executed between the IL&FS and HDFC.
Under this document (i.e., the AA) the parties agreed that the authorised
indebtedness of IL&FS in terms of the MFA, by way of the facility
together with the interest thereon was payable from the gross income and
revenue to be derived from the operation of the Business Centre Services
Agreements/Lease/Leave and License Agreement/s. It was also agreed
that ‘all the receivables derived/to be derived from the operation of the
Borrower’s Contracts, a sufficient portion of which, to pay the principal
and interest as and when the same shall become due’ in terms of the said
MFA was assigned and pledged and was to be ‘set aside for that purpose
on the same day’ and a Power of Attorney by way of Security Interest was
also executed between the IL&FS and HDFC.
      3. By an order, dated 01.10.2018, NCLT in a petition3, filed by the
Union of India (“UoI”) under Sections 241 and 242 of the Companies Act,
2013 (hereafter “the 2013 Act”) ordered to supersede the existing board
of directors of the IL&FS. A new board of directors was also constituted,
to take charge of the affairs of that company. Later, by its order dated
12.10.2018, the NCLT declined to issue a moratorium sought by the UOI,
(akin to a moratorium under Section 14 of the IBC) in respect of IL&FS
and its 348 group companies. Aggrieved, appeals were filed before the
NCLAT. By order dated 15.10.2018 NCLAT, inter-alia, stayed: (i) the
institution or continuation of suits or any other proceedings against the
IL&FS or its 348 group companies, before any court/tribunal/arbitration
panel/arbitration authority; (ii) any action to foreclose, recover or enforce
any security interest created over the assets of the IL&FS or those of its
348 group companies; and (iii) the acceleration, premature withdrawal
or other withdrawal, invocation of any term loan, corporate loan, bridge
loan, commercial paper, debentures, fixed deposits, guarantees, letter



3   No. 3638 (M.B.) of 2018
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1037
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


of support, commitment or comfort and other financial facilities or
obligations availed by the IL&FS and its 348 group companies.
      4. After the interim order of NCLAT, the borrower informed the
Escrow Bank about it, by an email dated16.10.2018. On 19.10.2018, HDFC
instructed the Escrow Bank to transfer monthly instalments from the Escrow
Account to the Lender’s Account. On 23.10.2018, IL& FS informed the
HDFC about the interim order from NCLAT (dated 15.10.2018). The letter
stated that the interim order restrained HDFC from appropriating IL& FS
account’s with Escrow Bank. IL&FS called upon the lender by letter dated
27.10.2018 to reverse the debit of ₹ 6.24 crores and credit the amount back
into the account of the borrower. HDFC responded to IL&FS’s letter, stating
that receivables (i.e. rents) in respect of the secured property were assigned
by IL&FS in its favour and that the asset ceased to belong to IL&FS.
      5. On 04.01.2019, IL&FS called upon HDFC to reverse the amount
which was debited by the Escrow Bank in the escrow accounts. By the order
dated 04.02.2019, NCLAT directed the UOI and IL&FS to approach Justice
(Retd.) D.K. Jain (“former judge of this court”) for consent and discuss the
terms and conditions to supervise the operation of the resolution process.
The UOI, through the Ministry of Corporate Affairs, in an affidavit stated
that certain banks were still debiting amounts from IL&FS group entities
classified as “Amber” and “Red” without authorization from the IL&FS
board and those debits flouted the order dated 15.10.2018. Restraint orders
were sought against banks and financial institutions enjoining them not to
debit the accounts of the IL&FS and its group entities and/or appropriate
the funds held in the said accounts without authorization of IL&FS and the
relevant group entities; and further return/refund/release such amounts that
have been debited. On 08.08.2019, NCLAT directed as follows:
     “...If any of the Bank/Financial Institution has debited any amount in
     violation of order of this Appellate Tribunal dated 15th October, 2018,
     it will be open to Union of India/ILFS to bring the same to the notice
     of Justice Shri D.K. Jain for appropriate orders and also intimate the
     Bank/Financial Institution that it may amount to contempt of court.”
     6. IL&FS wrote, on 22.08.2019 to former judge of this court to make
an appropriate order. IL& FS made representation before the learned
1038         SUPREME COURT REPORTS                       [2023] 14 S.C.R.


judge on 28.08.2019. A letter dated 03.09.2019 was sent by the HDFC
reiterating that monies in the escrow account were its exclusive property
and that IL&FS could not claim ownership over such property. The Escrow
Bank wrote on 04.09.2019 to IL&FS that it had acted in terms of Escrow
Agreement and was obliged to hold the money lying in trust for the purpose
for which it was received i.e. for the benefit of HDFC. Former judge of
this court issued a show-cause notice dated 30.09.2019 to the HDFC and
issued a notice to the Escrow Bank on 10.10.2019. The Escrow Bank on
23.10.2019 wrote to former judge of this court stating that the receivables
stood assigned in favour of HDFC and monies received were not the assets
of the IL&FS. Former judge of this court granted a personal hearing to
the parties. On 12.05.2020, former judge of this court recommended the
Escrow Bank and HDFC to maintain the status quo in the Escrow Account
till a final view was taken on the IL&FS’s application. The Escrow Bank
stopped debiting any amount from the Escrow Account and informed the
IL&FS and HDFC about this. On 03.07.2020, former judge of this court
issued a final order holding that the actions of the HDFC and Escrow Bank
in debiting the amount from the Escrow Account violated the orders passed
by NCLAT and thus HDFC and the Escrow Bank were directed to purge
themselves within two weeks.
      7. HDFC and IL&FS claimed opposing reliefs: the lender, on the one
hand, claimed- predictably that the interpretation and directions of former
judge of this court in the orders/directions dated 12 May 2020 and 03 July
2020 were incorrect and had to be set aside; the borrower, IL&FS in its
applications sought directions that ₹ 112,79,18,348 (Rupees One Hundred
Twelve Crore Seventy Nine Lakh Eighteen Thousand Three Hundred Forty
Eight),appropriated from its accounts towards debt service payments, were
in violation of the order dated 15.10.2018 from NCLAT and in compliance
with the order passed by former judge of this court on July 3, 2020.
     8. By the impugned order, NCLAT held that so far as part of the
receivables deposited in the Escrow Account which were sufficient to
meet the principal and interest (payable by IL&FS) assigned by the said
borrower to HDFC, no proprietary interest continued -with IL&FS nor
could it exercise any right over that part of the Escrow Account which
was assigned. It was held, borrower “may have right and interest on the
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1039
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


residual of deposits which is an excess of principal and interest for which
security interest is created in favour of the lender which Escrow Bank is
permitted to transfer to the borrower.” IL&FS’s argument that there was
no assignment of the receivables, but only the creation of security interest
in the receivables was rejected. It was also held that since there was an
express assignment of lease rental- sufficient to meet the principal and
interest payments-, the “assignment has to be accepted as assignment” in
favour of HDFC and that ‘pledge’ in AA did not take away the nature of the
transaction documents which was the assignment of receivables. NCLAT
also held that the freeze order of 15.10.2018 did not negate the AA nor did
it take away the property right of HDFC in the lease rental receivables.
However, the right over receivables deposited in the Escrow Account to
the extent they were in excess of principal and interest, was retained by
the IL&FS and in the event, any amount in excess of the said principal
and interest was transferred to or debited in the HDFC’s account and they
needed to be reversed, after adjusting the shortfall in debiting any interest
or principal of any earlier months.
     Parties’ contentions
       9. Mr. Ramji Srinivasan, Sr. Advocate urged, on behalf of IL&FS that
the MFA (dated 25.06.2018) and other agreements executed on 25.06.2018
clearly indicate that the Facility advanced to the Borrower was loan repayable
within 96 months. The Security Interest was created by the Borrower and
the receivables were nothing but security for repayment of the loan. The
Escrow Account was created in the Escrow Bank to facilitate the repayment
of principal and interest as per the repayment schedule. There was no transfer
of title in the receivables from Borrower to Lender. The receivables deposited
in the Escrow Bank were the assets of the Borrower which were deposited in
the Escrow Bank as security for the repayment of the loan of ₹ 400 Crores.
Till 15.10.2018, the escrow agent was debiting the amount as in terms of the
Escrow Agreement. However, after the interim order (dated 15.10.2018), the
Escrow Bank was not entitled to debit any amount to the Lender’s Account
which was prohibited by the interim order (dated 15.10.2018) of NCLAT in
the pending appeal. IL & FS secured repayment of the loan by assigning the
lease rental to the extent of principal and interest payable per month. The
MFA and all the agreements clearly depict the relationship between IL&FS
1040           SUPREME COURT REPORTS                             [2023] 14 S.C.R.


and HDFC. The AA cannot be read in isolation. The Escrow Bank held the
amount in the account as a trustee and the Power of Attorney Agreement
executed on 25.06.2018 was by way of security interest. Repayment was
secured by receivables and other additional securities.
      10. It was thus argued that the assignment of receivables is only security
and not transfer. It is submitted that detailed written submissions were filed
before former judge of this court by the parties and after considering every
contention, the order dated 03.07.2020 was made by him. That order by
former judge of this Court, considered all the submissions by the lender, the
borrower and the Escrow Bank, and after examining the principal (and the
facility agreement) and all other agreements and attendant circumstances.
Under that order, the lender and Escrow Bank were obliged to return the
amount debited i.e. ₹112,79,18,348/-.
       11. Learned senior counsel argued that the lender’s claim that the
facilities extended are in the nature of lease rental discounting facility (LRD)
as argued by HDFC, and not covered by the injunction is not borne out from
the record. He argued that the facility is nothing but a type of term loan
offered with security of rental income. The clear indicators that the Facility
is secured by charge created over the property and the receivables (rent)
can be gathered from the following: firstly, sanction letter for the term loan
and the Facility specifically refers to this as a loan for a term of 96 months
to be repaid by IL&FS from the lease rentals from commercial premises.
Secondly, the terms relating to security and repayment also establish this. In
fact, none of the documents contain any element or even a mention of the
sale and purchase of the debt of IL&FS. The transaction is a loan transaction
and not a sale of debt at all.
       12. Learned counsel refers to Clauses 3 (sets out purpose of availing
facility) and 4 (Establishes nature of relationship between the parties) of the
MFA to argue that purpose of availing facility was merely re-financing of the
existing debt and clause 4 of MFA clearly establish that nature of relationship
between the parties was that of lender-borrower and not that of seller and
buyer. It is also pointed out that pursuant to the execution of the financing
documents IL&FS submitted form CHG-one4, which is confirmed by HDFC


4   An application for registration, or modification of charge.
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1041
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


Ltd, i.e., the lender form for registration of creation of charge to secure the
Facility. Therefore, the lender in fact filed its claim as a secured creditor of
IL&FS before Grant Thornton India, the client’s management consultant.
      13. It is argued that various conditions in the MFA and the Escrow
Agreement indicate that the transaction is essentially a loan transaction
between the lender and the borrower with the creation of a security. Counsel
points out that the documents which are part of the MFA nowhere use the
expression “lease rent discounting”. It is also argued that in terms of the
Assignment and Administration Agreement (also executed on 25 June
2018), receivables which are relevant with respect to the security property
were created in favour of the lender bank. Because one clause5 uses the
word assignment and at the same time it also states that the amounts i.e.
receivables are pledged and will be set aside for that purpose. This clearly
indicates that the plain meaning of the term pledge and that the intention
of the parties was that this amount was to be treated as a security. The
expression assigned is clarified later, in the words “shall be set aside for
that purpose”. When used in conjunction with the expression “pledge”,
what was contemplated was the creation of a security of the property and
not its transfer.
      14. It is highlighted that the charge is a kind of security, whether the
creditor obtains possession of ownership of the assets or not; it is appropriated
to the satisfaction of the debt. From the provisions of the AA and the facility
agreement, it is absolutely clear that receivables were charged in favour of
HDFC Ltd, the lender, only for securing the obligations of the appellant
IL&FS under the Facility agreement and facilitation of repayment and it
did not amount to a transfer of the legal title over such receivables which
continues to vest with IL&FS. It is submitted that in these circumstances,
the holistic reading of all documents as resorted to by former judge of this
court was the correct approach. Lastly, it is pointed out that the receivables
or the rent paid into the account was to be held in trust by the escrow agent
which had to secure compliance with the tribunal’s order dated 15.08.2018
and the judgement dated 12.03 2020.



5   Clause 1 of the Assignment and Administration Agreement dated 25.06.2018 –
    Assignment and Pledge of Receivables.
1042          SUPREME COURT REPORTS                               [2023] 14 S.C.R.


       15. Mr. Mukul Rohatgi, learned Sr. Advocate appeared for HDFC Ltd.
and refuted the submissions of the learned senior counsel for IL&FS. It was
argued that a plain analysis of the transaction documents makes it clear
that the facility extended to the borrower is a Lease Rental Discounting
(LRD) loan transaction, which is materially different from a traditional
loan transaction. An LRD loan transaction involves the assignment/sale of
the rent receivables by the landlord to the financing entity at a discounted
value in terms of the transaction documents. A certain component of lease
rentals arising from the use of the TIFC Property (or Secured Property)
i.e., sufficient for repayment of the facility, has been irrevocably assigned
in favour of the lender till repayment of the said Facility. Clause 5(c)6
of Schedule I of the Facility Agreement recognizes that the assigned
receivables are the exclusive property of HDFC Ltd. The assigned
receivables are clearly the property of HDFC Ltd. The borrower has no
right/title or interest in the monies/receivables/amount deposited in the
Escrow Account. The relief of release/refund/reversal of amounts debited
from the Escrow Account stating that the same is in line with the order
dated 03.07.2020 issued by former judge of this court is misplaced since
the same has not attained finality and was under scrutiny by the tribunal
in the applications filed by the lender.
      16. It was submitted that no judicial order or judgment prohibited the
licensees of the TIFC property from depositing monthly lease rent in the
Escrow Account, nor the orders held that the lender was disentitled from
using the assigned receivables/rents. The transaction was not prohibited by
the order dated 15.10.2018, which was restricted to the assets of the IL&FS.
Assigned receivables were not its assets. They were consequently outside the
purview of the order dated 15.10.2018. It was contended that former judge of
this court by the order (dated 03.07.2020) unduly broadened the ambit of the
order dated 15.10.2018. The committee overlooked that the distribution of
the rentals/receivables was property of the lender and therefore, fell outside



6   5. Security and Repayment Specific Covenants:
    [..] (c) The Borrower agrees that the Receivables shall be exclusiveproperty of the
    Lender for the purpose of secured repayment ofthe Facility and as such the Borrower
    will not make any further borrowing on the strength of the Receivables on being
    Borrower’sproperty.
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1043
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


the scope of any direction of the 15th October 2018 order. The borrower was
not entitled to any reliefs as claimed in I.A. No 2196/ 2020 7.
      17. It was contended by HDFC that the transfer of ownership of a
portion of the rent receivables by IL&FS in its favour was sufficient to pay
the principal and interest whenever it became due in terms of the Facility
Agreement. It was not the entire rent receivables but only a portion of the
same sufficient to cover the principal and interest, was assigned. The balance
portion was not assigned; it continues to be owned by IL&FS. The borrower
hence continues to have title and interest in the residual receivables which
too was secured.
     Analysis and Conclusions
     18. For appreciation of the transaction (to determine whether the
assignment or arrangement was a transfer, or security interest), it would be
convenient to peruse portions of the impugned order, which reproduced the
relevant conditions in the various documents.
      19. The parties entered into a Master Facility Agreement (MFA) on
25.06.2018. The definition clause in the MFA, inter alia, defined [Cl. 2 (1)]
“due date”; Clause 2 (aa) defined “repayment” and clause 2 (cc) defined
“security”. Per Clause 2 (cc),“Security”had to have the same “meaning as
described in Clause-8 of this Agreement and also described in the Schedule-
III”. Likewise, secured property inter alia, included immovable property
described in Schedule III. The MFA envisioned that the borrower (IL&FS)
entersinto an escrow agreement “on such terms as agreed by the lender.
The power was to give irrevocable instructions to Escrow Bank. Clause 8
of the MFAdeals with the ‘security interest’.” Clause 8(8.1) is as follows:
     “8. SECURITY INTEREST- DESCRIPTION /CREATION/
     PERFECTION
     8.1. The Borrower create Security Interest in such form and manner as
     instructed by Lender on the asset/property more particularly described
     in Schedule-III to this Agreement as the principal Security for securing
     the repayment of the Facility.


7   Said IA was Filed for directions against Escrow Bank and lender seeking return of
    amount debited.
1044          SUPREME COURT REPORTS                        [2023] 14 S.C.R.


       The Borrower hereby unconditionally and irrevocably undertakes and
       confirms to create security interest on the said Secured Property in
       favour of the Lender and perfect the security creation as mentioned
       herein above in favour of the Lender in such form and manner as may be
       deem fit by Lender within 6 months from the date of first disbursement
       of the Facility. The Company further undertakes and confirms to open
       an Escrow Account within 30 days of the first disbursement of the
       Facility for the assignment of receivables arising/accruing from the
       TIFC Property and creating charge on the said Escrow Account in
       manner and form as made be deem fit by Lender.”
     20. Clause 13 of the MFA provided for ‘Assignment/Transfer’. Clause
13.1 of MFA is as follows:
       “13. ASSIGNMENT/TRANSFER
       13.1. The Borrower shall not assign or transfer all or any of its
       rights, benefits or obligations under the Facility Agreement and
       the Transaction Documents without the approval of Lender. Lender
       may, at any time, assign or transfer all or any of its rights, benefits
       and obligations under the Facility Agreement and the Transaction
       Documents. Notwithstanding any such assignment or transfer, the
       Borrower shall, unless otherwise notified by Lender, continue to
       make all payments under the Facility Agreement to Lender and all
       such payments when made to Lender shall constitute a discharge to
       the Borrower from its liabilities only to the extent of such payments.”
      Clause 15 covers ‘Event of Default’. Clause 15.2deals with
‘Consequence of Default and remedies’.Schedule-1 of the MFA provides
for ‘Special Conditions for Rental Discounting. ‘Receivables’ is defined in
Clause 1 of Schedule -I of the MFA in the following words:
       “Receivables” shall mean and include gross income and revenue
       derived from the operation of Client’s Contracts and shall include
       Deferred Receivables as stated in Appendix-1.”
     21. Clause 4 of Schedule-1of the MFA deals with ‘Borrower’s
Contracts Specific Covenants’. Clauses 4(c) and Clause 5 (a), (b) and (c)
provide as follows:
       “4. [..] (c) The Borrower shall not alter, change or modify the terms
       of the Borrower’s Contracts in so far as it relates to such terms which
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1045
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


     would have an adverse effect or impact on the Receivables and/or
     which shall otherwise detrimentally effect the Lender’s interest in the
     Secured Property and income thereof.”
     “5. SECURITY AND REPAYMENT SPECIFIC COVENANTS
     a) The Borrower agrees that the Facility shall be secured by exclusive
     security interest on the Receivables in such mode and manner as
     deemed fit and desired by the Lender.
     b) The Borrower shall, on execution of this Facility Agreement, assign
     the Receivables in favour of the Lender on such terms as would be
     entered into between the Borrower and the Lender and pursuant thereto
     shall execute a Power of Attorney and Assignment and Management
     Agreement in line with the draft enclosed herewith in Appendix-3 to
     the Special Conditions.
     c) The Borrower agrees that the Receivables shall be exclusive property
     of the Lender for the purpose of secured repayment of the Facility
     and as such the Borrower will not make any further borrowing on the
     strength of the Receivables as being Borrower’s Property.”
     22. An ‘Escrow Account Agreement’ was also entered between the
lender and the borrower on the same date under which the borrower has to
open an Escrow Account with the Escrow Bank. Recital(C) of the Escrow
Account Agreement provided:
     “(C) The Borrower has agreed that, the payments to be collected/
     received by the Borrower from the clients of Business Service Centre/
     License/Lessee of various Units/properties (hereinafter referred to as
     “the said Units”) built and/or to be built and leased/to be leased on
     the Secured Property detailed in Schedule B hereunder (hereinafter
     called “the said Property”) for/against which the Facility granted/to
     be granted by Lender as per the Offer Letter and Facility Agreement,
     shall be credited to the said Escrow Account (hereinafter referred
     to as “the Receivables”) and the Lender shall on satisfaction of
     the condition as described in Item No. 6 of Schedule A hereunder,
     adjust all the amounts to be paid by the Borrower to the Lender
     under the Facility Agreement, from time to time, out of the amounts
     credited in the said Escrow Account, and permit the transfer in the
1046          SUPREME COURT REPORTS                         [2023] 14 S.C.R.


       Designated account of the Borrower opened with the Escrow Bank,
       the amount as mentioned in Item No. 7 of Schedule A out of the
       remaining balance in the said Escrow Account after such adjustment
       as agreed hereunder.”
    Clause-3 of the Escrow Account Agreement provides ‘Bank’s
Covenants’ which reads as follows:
       “3. BANK’S COVENANTS:
       (a) The Escrow Bank hereby agrees to act as such and to accept all
       monies to be delivered to or held in the Escrow Account, pursuant to the
       terms and conditions of this agreement. This Escrow Bank shall hold
       and safeguard the Escrow Account, during the terms of this Agreement
       and shall hold all cash in the Escrow Account, at the request of the
       Borrower and to safeguard the repayment of the Facility and for the
       benefit of the Borrower and the Lender in accordance with the terms
       mentioned herein.
       (b) The Escrow Bank shall not be required to verify and ensure that the
       money(ies) deposited is the Receivables and all money(ies) deposited
       at any time in any quantum should be treated as the Receivables.
       (c) The Escrow Bank agreed that during the currency of the term of
       this Agreement as may be amended from time to time, the Escrow Bank
       shall ensure that the Escrow Account is operated and maintained as
       per the terms set out herein and shall not permit any deviation, without
       the written consent of the Lender.
       (d) The Escrow Bank agrees that all money(ies) received by it under this
       Agreement shall, until transferred in accordance with this Agreement,
       be held in trust for the purposes for which they were received, and
       shall be segregated from other accounts of the constituents of the
       Escrow Bank and from the funds and Property of the Escrow Bank, in
       accordance with the banking law and practice.
       (e) The Bank shall transfer such amounts to the account of the
       Borrower which are in excess of the minimum balance required to
       be maintained in the Escrow Account in accordance with the terms
       stated herein.”
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1047
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


     23. Clause 4(b) of the Escrow Account Agreement deals with
‘Operation and Maintenance’. Clause 4(a), (c) and (e) provides as follows:
     “4. OPERATION AND MAINTENANCE
     (a) The Borrower agrees that, the payments to be collected/received
     by the Borrower from the Business Service Centre/Licensee/lessee of
     various Units/properties built and/or to be built and leased/to be leased
     on the Property which is more particularly described in Schedule of
     the said Facility Agreement (hereinafter called “the said Property”)
     for/against which the Facility granted/to be granted by Lender as per
     the Offer Letter and Facility Agreement, shall be credited to the said
     Escrow Account (hereinafter referred to as “the Receivables”) and the
     Lender shall on satisfaction of the condition(s) as described in Item
     No. 6 of Schedule A hereunder, adjust all the amounts to be paid by
     the Borrower to the Lender under the Facility Agreement, from time
     to time, out of the amounts credited in the said Escrow Account, and
     transfer to the Designated Account of the Borrower, the amount as
     mentioned in Item No. 7 of Schedule A out of the remaining balance
     in the said Escrow Account after keeping the minimum balance in the
     Escrow Account.
     (c) The Lender shall be entitled to instruct the Escrow Bank from
     time to time to transfer amounts from the Escrow Account including
     as stated hereinabove. The Lender shall appropriate these monies
     towards the repayment of the Facility, as and when the same is due
     and payable in full together with all other amounts payable under the
     Facility Agreement.
     -------------------------
     (e) The Borrower hereby irrevocably authorizes the Escrow Bank to
     pay and to transfer the money(ies) received in the Escrow Account to
     the Lender as per the terms and conditions agreed in the Offer Letter,
     Facility Agreement and this Agreement as may be applicable from
     time to time.”
      24. An Assignment and Administration Agreement was also entered on
the same date i.e., 25.06.2018 with the lender and borrower. This agreement
1048          SUPREME COURT REPORTS                         [2023] 14 S.C.R.


provided for the assignment of the receivables by the borrower to the lender.
Recital clause3 is as follows:
       “3. It has been agreed that the authorised indebtedness incurred by
       the Borrower in terms of the Facility Agreement by way of the Facility
       together with the interest thereon shall be payable from the gross
       income and revenue to be derived from the operation of the Business
       Centre Services Agreements/Lease/Leave and License Agreement/s as
       more particularly detailed in the Schedule-1 (“Borrower’s Contracts”)
       to this Agreement (hereinafter referred to as “Receivables”).
       Xxxx
     Further Clause 1 of the Assignment and Administration Agreement
reads as:
       1. Assignment and Pledge of Receivables
       All the Receivables derived/to be derived from the operation of the
       Borrower’s Contracts, sufficient portion of which, to pay the principal
       and interest as and when the same shall become due in terms of the
       said Facility Agreement, is hereby assigned and pledged and shall
       be set aside for that purpose and this Assignment and Pledge shall
       extend to and include any assessments that may be levied pursuant to
       Clause 4(a) hereof.”
     25. A Power of Attorney document too was executed by IL& FS on
25.06.2018. By the Power of Attorney, the borrower irrevocably nominated,
constituted and appointed HDFC as its true and lawful attorney on behalf of
the borrower. By recital clause 2 of the said Power of Attorney document,
HDFC could “appropriate the proceeds received towards the discharge of
the Facility”; recital clause 5 enabled the lender to put to use, the secured
property and give the business centre, etc, on leave, license or lease basis in
the event the borrower’s existing arrangements were terminated or ended.
Recital clause 7 enabled HDFC to receive all rents and all other sums in
respect of such premises.
      26. The effect of these documents is what the court is concerned
with. It is a known principle of contract interpretation, that the substance
of a document, is discernible from its terms, rather than the label or
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1049
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


its nomenclature. In Yellapu Uma Maheswari and Ors. vs. Buddha
Jagadheeswararao & Ors.8, the court held:
      “It is well settled that the nomenclature given to the document is not
      decisive factor but the nature and substance of the transaction has to
      be determined with reference to the terms of the documents and that
      the admissibility of a document is entirely dependent upon the recitals
      contained in that document but not on the basis of the pleadings set
      up by the party who seeks to introduce the document in question.”
    In Assam Small Scale Ind. Dev. Corp. Ltd. & Ors. v. J.D.
Pharmaceuticals & Anr9 the court stated as follows:
      “The nature of transaction is required to be determined on the basis
      of the substance there and not by the nomenclature used. Documents
      are to be construed having regard to the contexts thereof wherefor
      ‘labels’ may not be of much relevance.”
      This was also stated in V. Lakshmanan v. B.R. Mangalagiri & Ors10
(that the “nomenclature or label given in the agreement as advance is not
either decisive or immutable.”). This principle of substance, over the form,
was followed in Super Poly Fabriks Ltd. vs. Commissioner of Central
Excise, Punjab11.
      27. That 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. Likewise, another allied principle of contract interpretation,
is that where the transaction is not the subject of one document, but several,
which refer to each other, or a reading of all, describe the entire contract,
then, it is open to the court to consider all of them together. This principle
was stated in S. Chattanatha Karayalar v The Central Bank of India & Ors12
wherein this court held that:



8    2015 (11) SCR 849
9    2005 (4) Suppl. SCR 232
10   1994 Supp (6) SCR 561
11   2008 (6) SCR 1076
12   1965 (3) SCR 318
1050          SUPREME COURT REPORTS                         [2023] 14 S.C.R.


       “The principle is well-established that if the transaction is contained
       in more than one document between the same parties they must be
       read and interpreted together and they have the same legal effect for
       all purposes as if they are one document. In Manks v. Whiteley, [1912]
       1 Ch. 735 Moulton, L.J. stated :
       “Where several deeds form part of one transaction and are
       contemporaneously executed they have the same effect for all purposes
       such as are relevant to this case as if they were one deed. Each is
       executed on the faith of all the others being executed also and is
       intended to speak only as part of the one transaction, and if one is
       seeking to make equities apply to the parties they must be equities
       arising out of the transaction as a whole.”
      28. Undoubtedly as argued on behalf of IL&FS, there are certain
conditions in the MFA – [clauses 2 (cc) and 2 (dd)] which define “security”
and “security interest”. Read along with clause 8.1 and Schedule III, these
would lead one to infer those receivables or rents that which IL&FS is
entitled to, form the security for the advance extended to it by the lender.
Nevertheless, as discussed earlier, these conditions cannot be read in isolation
because the MFA itself adverts to other documents - all of which were
executed by the parties contemporaneously. The condition in the Assignment
and Administration agreement which [was also executed on the same
day, i.e. 25.06.2018], clearly indicates that rents payable to IL&FS stood
unconditionally assigned to HDFC. The use of the expression “pledge” in
this context cannot be made much of. This is because the assignment is not
hedged with any condition; it entitles HDFC to appropriate the proceeds,
to the extent of liability of IL&FS.
      29. The Lease Rental Discounting (LRD) arrangement - a new kind
of financial agreement by which a banker allows credit facilities to a
commercial property owner, has the flexibility of ensuring that the asset
owner is given access to credit. The dominant condition is that a substantial
portion or the entire rent or receivables which the owner would be entitled
to are made- sold or assigned, absolutely to the creditor bank. This is with
the intention that the borrower’s liabilities are discharged automatically from
the proceeds payable in respect of the property. Such amounts virtually are
by way of unsecured debts. In other words, future rent payable is actually an
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1051
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


unsecured debt that the owner/borrower would have been otherwise entitled
to claim, but for the assignment or transfer, to the lender/creditor. Because
the owner is a debtor of the bank, the latter becomes the creditor of the
tenant or the lessee as the case may be. This arrangement has the advantage
of virtually ring fencing the creditor from the eventuality of bankruptcy or
an insolvency event, which the borrower might be exposed to. In fact, the
Reserve Bank of India (RBI) has formulated guidelines which regulate all
banks’ conduct in regard to the LRD facilities and they extends to a class
of borrowers who own commercial properties.
      30. It would also be relevant at this stage to notice that clauses 1
and 4(c) and (j) of the Assignment Agreement categorically set aside the
rents payable to IL&FS, in favour of the assignee, i.e. the lender bank.
Furthermore, the Escrow Agreement records (through clause 2) that all
receivables to which the borrower would be entitled would be deposited in
the escrow account. Furthermore, the lessees or tenants of the properties
owned by the borrower be instructed to pay such an amount in the escrow
account itself. Clause 4(c) of the Escrow Agreement is more categorical;
it authorizes only the lender (i.e., HDFC) to instruct the escrow bank to
transfer the amounts and permits the bank to appropriate amounts towards
adjustment arising out of the Facility liability. In the same line, the General
Power of Attorney (GPA) document (especially clauses 2 and 5) categorically
entitles the lender/HDFC to appropriate the proceeds deposited towards the
discharge of the borrower’s liability under the Facility. Clause 5 similarly
entitles access to the lease rent. Furthermore, the bank/lender virtually steps
into the shoes of the borrower and by the terms of the GPA is also authorized
to let out the premises in case due to an unforeseen situation an existing
lessee or tenant vacates it or is unable to pay.
       31. The borrower is correct in arguing that the expression LRD is
nowhere used in any of the documents executed at the time. Yet, as discussed
earlier in the judgment, it is the nature and substance of the transaction which
is determinative. An 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,
i.e., the rents payable.
1052          SUPREME COURT REPORTS                         [2023] 14 S.C.R.


      32. It would at this stage, be necessary to consider whether such
amounts payable on a future date are to be considered property and, therefore,
capable of transfer. Under the Transfer of Property Act, 1882, Section 5 states
generally that all manner of property is capable of transfer. Section 6 lays
out what are the kinds of properties or actions which are not transferable:
these are “personal claims” in the nature of tortious claims and “choices
in action” cannot be transferred.
     33. “Actionable claim” is defined by the Transfer of Property Act,
1882 (hereafter “TPA”) in the following manner:
       “Section 3 Interpretation clause….
       “actionable claim” means a claim to any debt, other than a debt
       secured by mortgage of immoveable property or by hypothecation or
       pledge of moveable property, or to any beneficial interest in moveable
       property not in the possession, either actual or constructive, of the
       claimant, which the Civil Courts recognise as affording grounds for
       relief, whether such debt or beneficial interest be existent, accuring,
       conditional or contingent:”
     Thus, in terms of Section 3 of the TPA, actionable claim means (a)
claim to an unsecured debt (other than a debt secured by mortgage of
immovable property, hypothecation or pledge (b) beneficial interest in a
movable property. Both these are recognised as enforceable. Other claims,
however, do not fall within the expression “actionable claim”.
     34. Sections 130, 131 and 132 of TPA, deal with transfer of actionable
claims:
       “130. Transfer of actionable claim—
       (1) The transfer of an actionable claim [whether with or without
       consideration] shall be effected only by the execution of an instrument
       in writing signed by the transferor or his duly authorised agent, shall
       be complete and effectual upon the execution of such instruments,
       and thereupon all the rights and remedies of the transferor, whether
       by way of damages or otherwise, shall vest in the transferee, whether
       such notice of the transfer as is hereinafter provided be given or not:
       Provided that every dealing with the debt or other actionable claim
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1053
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


     by the debtor or other person from or against whom the transferor
     would, but for such instrument of transfer as aforesaid, have been
     entitled to recover or enforce such debt or other actionable claim,
     shall (save where the debtor or other person is a party to the transfer
     or has received express notice thereof as hereinafter provided) be valid
     as against such transfer.
     (2) The transferee of an actionable claim may, upon the execution of
     such instrument of transfer as aforesaid, sue or institute proceedings
     for the same in his own name without obtaining the transferor’s consent
     to such suit or proceeding and without making him a party thereto.
     Exception —Nothing in this section applies to the transfer of a marine
     or fire policy of insurance or affects the provisions of section 38 of the
     Insurance Act, 1938 (4 of 1938). Illustrations
     (i) A owes money to B, who transfers the debt to C. B then demands
     the debt from A, who, not having received notice of the transfer, as
     prescribed in section 131, pays B. The payment is valid, and C cannot
     sue A for the debt.
     (ii) A effects a policy on his own life with an Insurance Company and
     assigns it to a Bank for securing the payment of an existing or future
     debt. If A dies, the Bank is entitled to receive the amount of the policy
     and to sue on it without the concurrence of A’s executor, subject to the
     proviso in sub-section (1) of section 130 and to provisions of section
     132.
     Section 131. Notice to be in writing signed- Every notice of transfer
     of an actionable claim shall be in writing, signed by the transferor
     or his agent duly authorized in this behalf, or, in case the transferor
     refuses to sign, by the transferee or his agent, and shall state the name
     and address of the transferee.”
     35. In Mewa Lal and Ors. vs. Tara Rani13it was held that:
     “Actionable claim can be transferred only by execution of an
     instrument in writing signed by the transferor or his duly authorised


13 AIR 1973 All 165
1054            SUPREME COURT REPORTS                        [2023] 14 S.C.R.


       agent, whereas under Section 54 of the Transfer of Property Act,
       “Sale” is a transfer of ownership in exchange for a price paid or
       promised or part-paid and part-promised. This payment of price, in
       full or in part or promised is by the purchaser to the seller. The sale
       of a property of a value of more than Rs. 100/- has to be compulsorily
       registered, whereas, an actionable claim of any amount can be had
       only by execution of an instrument. Thus, the sale of a property and
       sale of an actionable claim are two different things and one has no
       relation with the other. As the transfer of an actionable claim is not
       done by a registered deed…”
     36. This court has ruled, in Sunrise Associates vs Govt. Of NCTof
Delhi14 that:
       “Distinct elements are deducible from the definition of ‘actionable
       claim’ in Section 3 of the Transfer of Property Act. An actionable claim
       is of course as its nomenclature suggests, only a claim. A claim might
       connote a demand, but in the context of the definition it is a right,
       albeit an incorporeal one. Every claim is not an actionable claim. It
       must be a claim either to a debt or to a beneficial interest in movable
       property. The beneficial interest is not the movable property itself, and
       may be existent, accruing, conditional or contingent. The movable
       property in which such beneficial interest is claimed, must not be in
       the possession of the claimant. An actionable claim is therefore an
       incorporeal right.
       ******
       An actionable claim would include a right to recover insurance money
       or a partner’s right to sue for an account of a dissolved partnership or
       the right to claim the benefit of a contract not coupled with any liability
       (see Union of India v. Sarada Mills (1973 SCR (2) 484).. A claim for
       arrears of rent has also been held to be an actionable claim State of
       Bihar v Maharajadhiraja Sir Kameshwar Singh 1952 SCR 889, 910). A
       right to the credit in a provident fund account has also been held to an
       actionable claim (Official Trustee, Bengal v L. Chippendale AIR 1944


14 2006 Supp(2) SCR 421
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1055
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


     (Cal.) 335; Bhupathi Mohan Das v Phanindra Chandra Chakravarthy
     & Anr. AIR 1935 (Cal.) 756).”
      The issue involved in that case was whether the sale of lottery tickets,
amounted to the sale of goods, attracting a sales tax levy. The court held that
the sale did not involve goods, but the sale of actionable claim:
     “The question is, what is this right which the ticket represents? There
     can be no doubt that on purchasing a lottery ticket, the purchaser
     would have a claim to a conditional interest in the prize money which
     is not in the purchaser’s possession. The right would fall squarely
     within the definition of an actionable claim and would therefore be
     excluded from the definition of ‘goods’ under the Sale of Goods Act
     and the sales tax statute [..]”
      The court characterised the rights contained in a lottery ticket, and
that they represented a right in futuro, the sale of which amounted to the
sale of an actionable claim:
     “The right to participate being an inseparable part of the chance to
     win is therefore part of an actionable claim. The authorities considered
     by the Court in H.Anraj do not support the sub division of the chance
     to win into a further distinct right to participate. The Court sought
     to draw the distinction between the chance to win and the right to
     participate by describing the former as a right ‘in futuro’ and the latter
     as “in praesenti”. Both the rights are in fact ‘in futuro’. In any event
     the distinction is immaterial to the question as to whether the subject
     matter of the transfer is an actionable claim, since an actionable claim
     may be existent, accruing, conditional or contingent.”
     37. In another decision, Noor & Ors. v G.S. Ibrahim (Dead) by LRs15it
was held that:
     “If right to recover the arrears is assigned, then the transferee/landlord
     can recover those arrears as rent and if not paid maintain a petition
     for eviction under the rent laws for those arrears as well.”



15 2003 Supp (2) SCR 204
1056           SUPREME COURT REPORTS                         [2023] 14 S.C.R.


     38. In another decision, ICICI Bank v Official Liquidator of APS Star
Industries Ltd16this court held that:
       “rights under a contract are always assignable unless the contract is
       personal in its nature or unless the rights are incapable of assignment,
       either under the law or under an agreement between the parties. A
       benefit under the contract can always be assigned. That, there is, in law,
       a clear distinction between assignment of rights under a contract by a
       party who has performed his obligation thereunder and an assignment
       of a claim for compensation which one party has against the other for
       breach of contract.
       19. In the case of Camdex International Bank Ltd v Bank of Zambia
       reported in (1998) Q.B. 22 (CA) the following observation which is
       relevant to the present case needs to be quoted:
       “The assignment of a debt will not be contrary to public policy solely on
       the grounds that the assignee has purchased the debt for a considerably
       discounted price or because that price is only payable after a period
       of credit. Nor will the assignment be contrary to public policy simply
       because the assignee may make a profit on the transaction at the end
       of the day. If there was no prospect of a profit, Hobhouse LJ observed,
       commercial entities would never purchase debts.”
       20. Similarly, the following proposition in Chitty on Contracts, 27th
       edn. (1994) at para 19.027 is relevant to be noted.
       “It is also well established that a claim to a simple debt is assignable
       even if the debtor has refused to pay. The practice of assigning or
       `selling’ debts to debt collecting agencies and credit factors could
       hardly be carried on if the law were otherwise. “
       21. In view of the above exposition of law, we find that under the
       impugned Deed of Assignment only the Account Receivables in the
       books of ICICI Bank Ltd. has been transferred to Kotak Mahindra
       Bank Ltd. The obligations of ICICI Bank Ltd. towards its borrower(s)
       (customer) under the loan agreement secured by deed of hypothecation/



16 2010 (12) SCR 644
INFRASTRUCTURE LEASING AND FINANCIAL SERVICES LTD 1057
     v. HDFC BANK LTD. & ANR. [S. RAVINDRA BHAT, J.]


      mortgage have not been assigned by ICICI Bank Ltd. to the assignee
      bank, namely, Kotak Mahindra Bank Ltd. Hence, it cannot be said
      that the impugned Deed of Assignment is unsustainable in law. The
      obligations referred to in the impugned Deed of Assignment are the
      obligations, if any, of ICICI Bank Ltd. towards Kotak Mahindra Bank
      Ltd. (assignee) in the matter of transfer of NPAs.”
      39. The earlier discussion in this judgment, about the true nature of
the transaction in this case led this court to hold that it is an assignment and
not a pledge. The reference to pledge, in some places in the documents, did
not undermine the fact that the rents payable to and receivable by the lender
(IL&FS) stood absolutely assigned to HDFC. The provisions of the TPA and
the discussion of the various authorities support the conclusion that there
can be a transfer of debts, which are defined as actionable claims. In the
present case, the rents payable by IL&FS tenants, lessees and licensees are
debts, which stood transferred to the creditor, i.e. HDFC Bank. Therefore, the
NCLAT’s conclusions are unexceptionable; the challenge to its correctness,
therefore fails.
      40. For the foregoing reasons, this court holds that there is no merit
in the appeal. It is accordingly dismissed, there shall be no order on costs.
Pending application(s), if any, shall also stand disposed of.


Headnotes prepared by:                                          Appeal dismissed.
Nidhi Jain