TReDS reverse factoring preserves trade receivables as operational debt, preventing post-implementation reclassification from reopening a completed resolution process.

Discounted invoices acquired by a bank under a TReDS reverse-factoring arrangement remain operational debt where the bank pays suppliers for pre-existing trade receivables and does not disburse funds to the corporate debtor for the time value of money. Assignment changes the payee, not the nature of the underlying trade payable, so the bank stands in the suppliers' position as an operational creditor. An alleged error in recording a concession does not affect the result where classification is independently determined on merits. A creditor that delays filing its claim in the directed operational-creditor category need not be included in an approved plan, particularly after full implementation, payments, and dissolution of the monitoring committee.

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Issues: (i) Whether discounted trade receivables acquired by a bank under a TReDS reverse-factoring arrangement constitute financial debt or operational debt; (ii) Whether the alleged erroneous recording of a concession regarding precedent vitiated the impugned order; (iii) Whether a claim filed in an incorrect category required inclusion in the resolution plan despite the creditor's delayed filing in the correct category; (iv) Whether relief could be granted after approval and full implementation of the resolution plan.

Issue (i): Whether discounted trade receivables acquired by a bank under a TReDS reverse-factoring arrangement constitute financial debt or operational debt.

Analysis: Financial debt under Section 5(8) requires disbursal against consideration for the time value of money. Under the TReDS mechanism, suppliers assigned to the bank their pre-existing receivables arising from goods supplied to the corporate debtor after the bank discounted the invoices and paid the suppliers. No funds were disbursed to, or placed at the disposal of, the corporate debtor. The debtor's obligation remained the trade payable for goods received, merely payable to the assignee rather than the suppliers. The discount and charges for delayed payment were compensation for early realisation of trade receivables, not consideration for an independent loan. An assignment does not transform operational debt into financial debt; the financier steps into the suppliers' position as an operational creditor. The claimant's status as a scheduled commercial bank does not alter the substance of the transaction.

Conclusion: The TReDS reverse-factoring claim is operational debt, not financial debt, and the bank is an operational creditor.

Issue (ii): Whether the alleged erroneous recording of a concession regarding precedent vitiated the impugned order.

Analysis: The classification issue was independently determined on merits and reached the same conclusion as the adjudicating authority. Therefore, even assuming that the alleged concession was incorrectly recorded, it had no effect on the outcome.

Conclusion: The alleged error regarding concession does not vitiate the impugned order.

Issue (iii): Whether a claim filed in an incorrect category required inclusion in the resolution plan despite the creditor's delayed filing in the correct category.

Analysis: The resolution professional classified the claim as operational debt and specifically directed filing in the appropriate form. The creditor instead persisted with its financial-creditor claim and filed the operational-creditor claim only after dismissal of its application and after approval of the plan by the committee of creditors. A verifiable claim cannot be said to have been improperly ignored where the creditor did not timely lodge it in the category identified by the resolution professional.

Conclusion: The delayed operational-creditor claim did not require inclusion in the resolution plan.

Issue (iv): Whether relief could be granted after approval and full implementation of the resolution plan.

Analysis: The resolution plan had been approved, fully implemented, payments made, and the monitoring committee dissolved. Reclassification at that stage would unsettle a completed insolvency resolution process, and no ground within the limited scope for challenging an approved plan was established.

Conclusion: No relief capable of disturbing the completed resolution process can be granted.

Final Conclusion: The classification of the bank's TReDS receivables as operational debt remains undisturbed, and the completed resolution process cannot be reopened on that claim.

Ratio Decidendi: A financier acquiring discounted invoices under a TReDS reverse-factoring arrangement, without disbursing funds to the corporate debtor for the time value of money, acquires assigned operational receivables and does not become a financial creditor.

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