TaxTMI 
TaxTMI 
2018 (9) TMI 1530
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....m Private Limited (CIN No. U51101DL2014PTC270694) against whom initiation of Corporate Insolvency Resolution Process has been prayed for, was incorporated on 22.08.2014 having its registered office at House No. 32/43, 3rd floor, West Punjabi Bagh, New Delhi. Since the registered office of the respondent corporate debtor is in New Delhi, this Tribunal having territorial jurisdiction over the NCT of Delhi is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor under sub-section (1) of Section 60 of the Code. 3. The applicants have proposed the name of Shri Subodh Gokhale, with registration number IBBI/IPA-002/IP-N00317/2017-2018/10922, having office at 1 samriddhi, A/48, Gokuldham, Goregaon East, Mumbai Maharashtra and email id [email protected]. A communication dated 05.02.2018 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has also been placed on record. Shri Subodh Gokhale, has agreed to accept appointment as the IRP if an order admitting the present application is passed. There is a declaration made by....
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....tor transferred a sum of Rs. 6,14,000/- to the bank account of Mr. Arvind Garg, Keeping sum of Rs. 18,86,000/- as balance payment [principal amount]. 10. The petitioner has also placed on record copies of the following documents in support of the loan granted to the Respondent company and in support of the claimed financial debt: i. Certificate of incorporation of Corporate Debtor ii. Company Master Data of Corporate Debtor iii. Bank account details of Petitioner/Applicant iv. ITR of Corporate Debtor for 2015-16 v. ITR of Corporate Debtor for 2016-17 vi. Auditor's report dated 02.09.2017, of Corporate Debtor vii. Notice form 3 & 4 dated 03.01.2018, served upon the Corporate Debtor. viii. Delivery receipt dated 05.01.2018 for the notice by Indian Postal Services. 11. It is also the case of the applicants that since all requests for repayment of balance amount due and payable failed, the applicants issued demand notice on 03.01.2018 in Form 3 under rule 5 of the Rules and also a notice in Form 4 under Rule 5 of the Rules on 03.01.2018. 12. It is alleged that the notice was received by the Corporate Credi....
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....ely, (a) Financial creditor (b) Operational creditor, and (c) Corporate debtor itself. 18. The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the "Financial Creditor" is delineated under Section 7 of the Code, wherein only "Financial Creditor"/"Financial Creditors" can file an application. As per Section 7(1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. Section 7 of the Code thus mandates that only the applicant "Financial Creditor" has to prove the default. In other words, even if there is a clear default, the application under Section 7 of the Code is not maintainable in case the applicant is not a financial creditor. Therefore, in order to maintain the present application filed under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor, the present applicants have to satisfy that they come within the definition of "Financial Creditor". 19. The expressions "Financial Creditor" and "Financial debt" have been defined in Section 5 (7) and 5 (8) of the Code, wh....
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....ing essential criteria: i. A person to whom a 'financial debt' is owned and includes a person whom such debt has been legally assigned or transferred; ii. The debt along with interest, if any, is disbursed against the consideration for time value of money and includes any one or more mode of disbursed as mentioned in clause (a) to Clause (i) of sub-section (8) of Section 5. 21. Precisely "Financial debt" is a debt along with interest, if any, which is disbursed against consideration for time value of money. 22. In the present case admittedly, applicants issued notices both in Form 3 as well as in Form 4 under rule 5 of the Rules on 03.01.2018 claiming themselves as operational creditors. Secondly, neither any document has been placed on record pertaining to the loan nor there is any supporting evidence to establish applicable rate of interest to be paid on the said loan. Thirdly, the applicants have failed to prove that the loan was disbursed against consideration for time value of money, particularly when respondent company has affirmed that no interest has been paid nor payable at any point of time. 23. It is pertinent to refer here that the balance she....
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....or time value of money, particularly when respondent company has affirmed that no interest has been paid nor payable at any point of time. 28. Similarly in the matter of Shreyans Realtors (P.) Ltd. v. Saroj Realtor & Developers (P.) Ltd. [Company Appeal (AT) (Insolvency) No. 311 of 2018, vide its order dated 04.07.2018] Hon'ble NCLAT has observed that when corporate debtor never accepted the component of interest and has given no undertaking to repay the loan with interest; the Appellants cannot claim to owe 'financial debt' from the 'Corporate Debtor' and thereby cannot be claimed to be a 'Financial Creditor' as defined under Section 5(7) & (8) of the Insolvency and Bankruptcy Code, 2016. 29. In the present case also, there is no document to show that the respondent company either accepted or undertook to repay the loan with interest. The applicant has failed to justify how without any provision of interest the debt can be termed as a financial debt. Once the claim made in the application does not pertain to 'disbursement against consideration for time value of money', the present claim will not come within the purview of 'Financial Debt' and consequently the applicants cann....