Appellants ruled Operational Creditors, not Financial Creditors under Insolvency Code. Appeal dismissed.

The Tribunal upheld the Adjudicating Authority's decision, determining that the appellants were Operational Creditors, not Financial Creditors of the Corporate Debtor. The appellants' involvement in invoice discounting did not qualify them as Financial Creditors under the Insolvency and Bankruptcy Code. As they had not disbursed the amount as a financial debt to the Corporate Debtor, the appeal was dismissed, directing the appellants to pursue their remedy under Section 9 of the Code.

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Issues Involved:
The judgment addresses the issues of whether the appellants are Financial Creditors or Operational Creditors, the validity of the application filed under Section 7 of the Insolvency and Bankruptcy Code, and the interpretation of relevant provisions of the Code.

Issue 1: Appellants' Status as Financial Creditors
The case involves two appeals filed against the same impugned order regarding the dismissal of an application under Section 7 of the Insolvency and Bankruptcy Code. The appellants claimed to be Financial Creditors of the Corporate Debtor due to their involvement in invoice discounting. The Adjudicating Authority found that the appellants had stepped into the shoes of the Operational Creditor (Seller) and were not eligible to file under Section 7 but could file under Section 9 of the Code.

Issue 2: Interpretation of Financial Debt
The core issue was whether the appellants, as financiers, constituted Financial Creditors under the Code. The appellants argued that the amount disbursed by them against the receivables qualified as a financial debt under Section 5(8)(e) of the Code. They contended that the disbursement was made on a recourse basis, fulfilling the conditions of financial debt.

Issue 3: Application of Relevant Code Provisions
The Respondent challenged the appellants' status as Financial Creditors, citing Section 5(20) and 21(5) of the Code. The Respondent argued that the amount was not disbursed to the Corporate Debtor and relied on previous judgments to support the contention that the appellants were Operational Creditors. The Tribunal analyzed the agreements and transactions to determine the nature of the debt and the appellants' creditor status.

Conclusion:
The Tribunal upheld the Adjudicating Authority's decision, stating that the appellants, by discounting the invoices of the Seller, had become Operational Creditors and not Financial Creditors of the Corporate Debtor. The Tribunal found that the appellants had not disbursed the amount as a financial debt to the Corporate Debtor, leading to the dismissal of the appeal. The appellants were directed to seek their remedy under Section 9 of the Insolvency and Bankruptcy Code.

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