TaxTMI 
TaxTMI 
2020 (2) TMI 633
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....y of the Application which was filed by the Financial Creditor along with Annexures, is at Page - 9 of the Reply filed by the Financial Creditor (Diary No.11325). The Application was filed by the Financial Creditor claiming that there was debt and default of Rs. 10,29,56,582/-. In short, the Financial Creditor claimed to have disbursed Rs. 2,51,44,385/-in instalments between October, 2016 to March, 2017 to the Corporate Debtor by way of financial assistance. The Financial Creditor claimed that the amount was repayable by 30th June, 2017 or on demand with interest @ 24% per annum. A "Share Pledge/Finance Facility Agreement" dated 4th April, 2017 (Page - 48) was executed, and the limit was extended to Rs. 5 Crores. Financial Creditor claimed that on 17th April, 2017, demand Promissory Note (Page - 30) was executed by one of the Directors of the Corporate Debtor for and on behalf of the Company as well as in his personal capacity accepting the liability of the financial loan. The Board of Directors pledged shares worth Rs. 5 Crores. According to the Financial Creditor, later on, on 31st August, 2017, Albus Conserves Pvt. Ltd. - a sister concern of the Corporate Debtor in Board of Dire....
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....nder:- "6. Upon appraisal of the facts of the case and arguments advanced on behalf of both parties, this Bench is of the opinion that a financial transaction did take place. The agreement on record is prima-facie one of granting financial assistance to be repaid along with interest. Further, a financial debt as defined under Section 5(8)(f) includes any amount raised under any other transaction, including any forward sale or purchase agreement having the commercial effect of borrowing. 7. The facts of this case squarely fall within the definition of Section 5(8)(f) to qualify as a financial debt, notwithstanding that it was a loan attracting interest. The execution of the demand promissory note, tender of cheques which bounced, acceptance of receipt of financial assistance against offer of security, execution of a specific Finance Agreement all point out to financial assistance availed to be liquidated against future purchases or be returned on demand. In view of the same, the objections raised on behalf of the Corporate Debtor do not merit any consideration. The petitioner/financial creditor is entitled to the prayer made. This Petition is therefore Admitted." ....
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....F Commodities DMCC, UAE, on our behalf. We hereby take notice that demurrage is being incurred by M/s. TUF Metallurgical Pvt. Ltd. towards withholding of this material at the Vizag Port, on our behalf. We hereby authorize M/s. TUF Metallurgical Pvt. Ltd. to sell this material in the market at best available rate to any interested buyer either in domestic/overseas market, as the case may be, so as to reduce/mitigate/minimize the loss on the one hand and to save the material from deterioration on the other. It is affirmed and assured that whatever quantity/load of this material remains unsold (full or part) despite such best efforts, the same together with its corresponding procurement, withholding, service charge/cost, demurrage, interest, etc. and other associated costs shall lie to my/our account and for which we shall remain legally bound to pay/settle." Referring to above, the argument is that the Corporate Debtor clearly accepted in this letter that the demurrage was being incurred by the Financial Creditor towards withholding of the material at Vizag Port on behalf of the Corporate Debtor. The amount was also confirmed and thus, it is claimed that even this amount ....
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....erest and the manner of its calculation/charge shall be subject to change but no change shall become enforceable unless executed into writing by the parties.' In the terms and conditions, para - 3 of the Agreement reads as under:- "(3) That the Borrower identifies and acknowledges the selling/marketing and export potential and capabilities of the Lender and this arrangement structured through the present Agreement shall be utilized to work in such a way where the Borrower shall perform the role of fulfilling the production requirements/orders that may be placed by the Lender and the Lender shall perform the role of seller/marketer/exporter/supplier of the said production, either through/under its own banner or through any of its group entities, establishing a connection/bridge between the Lender and the end user/customers/clients based on price & terms mutually agreed from time to time. The Borrower agrees and assures that the Lender shall have the first right of material procurement from the production capacities of the plant of the Borrower. The Borrower categorically assured that its production facilities shall be under an obligation to keep ready the desir....
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.... Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; 1[Explanation.-For the purpose of this sub-clause.- (i) any amount raised from the allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meaning respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrum....