TaxTMI 
TaxTMI 
2020 (11) TMI 993
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....impugned order dated 28.09.2020 by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench-V on the ground that the default in payment of Settlement Agreement does not come under the definition of financial debt. Appellant, being aggrieved thereof, has filed the instant appeal on the ground that the Respondent who was the Corporate Guarantor was liable in terms of the Memorandum of Understanding dated 22.09.2017 to discharge the liability with respect to the financial debt advanced to the principal borrower- 'Tempo Appliances India Ltd.' and this was independent of Settlement Agreement, whereunder the Corporate Guarantor had undertaken to discharge the liability arising out of dishonoring of cheques issued by the Princip....
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....on the Settlement Agreement dated 16.01.2020 executed inter se the parties to this appeal lays it bare that preceding this Settlement Agreement Memorandum of Understanding dated 22.09.2017 had been executed between the Appellant and the Principal Borrower, wherein Respondent herein stood as guarantor. Since the cheques issued by the Principal Borrower were dishonored on presentation, Respondent as guarantor came forward to pay the outstanding amount of Rs. 86 lakh with interest calculated at Rs. 22 lakh and issued two cheques in consideration of such liability. It appears that the payment schedule had been agreed upon. A bare look at this Settlement Agreement would reveal that the same supersedes the Memorandum of Understanding dated 22.09.....
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....rrowing; (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 instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause;" 4. Mere obligation to pay does not bring the liability within the ambit of 'financial debt'. The debt, along with interest, if any, should....