Financial debt under insolvency law requires proof of time value of money, default, and limitation before section 7 admission.

For admission under section 7 of the Insolvency and Bankruptcy Code, 2016, the applicant must prove a financial debt, default, and a claim within limitation. Deposits into the corporate debtor's account were not enough because no agreement, repayment term, or interest arrangement showed disbursement against the time value of money, so the amounts did not qualify as financial debt and the applicants were not financial creditors. The record also did not establish a distinct default date, and the 2019 filing was beyond three years from the last deposits. In the absence of adequate proof of default, the application was held not maintainable and the insolvency petition was dismissed.

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Issues: Whether the application under section 7 of the Insolvency and Bankruptcy Code, 2016 was maintainable on the basis that the amounts advanced constituted financial debt, default was proved, and the claim was within limitation.

Analysis: The application proceeded on deposits made by the applicants into the corporate debtor's account, but no agreement, repayment term, or agreed rate of interest was produced to show that the amounts were disbursed against the consideration for the time value of money. On that basis, the deposits were not shown to fall within the definition of financial debt under section 5(8) of the Insolvency and Bankruptcy Code, 2016, and the applicants also failed to establish that they were financial creditors within section 5(7) of the Insolvency and Bankruptcy Code, 2016. The record further did not show a default date other than the dates of the last deposits, and the application filed in 2019 was beyond three years from those dates. The absence of a record of default with an information utility or other sufficient evidence also affected admissibility under section 7.

Conclusion: The application under section 7 was not admissible, as the applicants failed to prove financial debt and the claim was barred by limitation.

Final Conclusion: The petition for commencement of corporate insolvency resolution process was rejected and the proceedings were dismissed.

Ratio Decidendi: For admission under section 7 of the Insolvency and Bankruptcy Code, 2016, the applicant must establish a legally cognizable financial debt, default, and a claim within limitation; mere deposits without proof of disbursement for the time value of money do not satisfy that threshold.

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