TaxTMI 
TaxTMI 
2022 (12) TMI 352
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....or the Appellant as well as Learned Counsel for the Respondent. 2. This Appeal has been filed against the order dated 01.09.2022 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi-IV, by which Section 7 Application filed by the Appellant has been rejected holding that debt which was claimed by the Appellant to be payable by the Respondent is not a financial debt. 3. There was a contractual arrangement between the Appellant and the Respondent No.1 for providing premises for which LoI was issued on 31.07.2015. Certain parts of the LoI paras 1 to 7 are as follows:- "LETTER OF INTENT This Letter of Intent ("LOI") is made at Gurgaon on this 31st day of July 2015 1. Intending Lessor Af....
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....ediately refund to the Lessee all rent and maintenance charges paid by the Lessee for such premises. 7. Interest Free Security Deposit (IFSD) Equivalent to 6 (Six) months' rental of which part deposit equivalent to 3 (Three) months' rent is payable within seven (7) days of signing this 'Letter of Intent' and post clearance of legal due diligence by the Lessee (hereinafter referred to as Earnest Money) and the remaining deposit equivalent to 3 (Three) months' rent shall be payable upon execution of the Lease deed. 4. The Appellant, after the LoI, paid an amount of Rs.1.2 Crore to the Respondent. No lease could be executed between the parties in pursuance of the LoI. The Appellant issued Section 8 Notice to the Respondent and file....
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....f 2019 dated 18.02.2020 'as withdrawn' will not in any way preclude the Applicant/ Appellant to approach Competent Authority/ Adjudicating Authority in seeking redressal of its grievances, by filing necessary application, of course, in accordance with Law and in manner known to Law if it so desires/ advised. Before parting with the case, this Tribunal makes it abundantly clear that it is open to the respective parties to raise all factual and legal pleas before the 'Competent Authority'/ 'Adjudicating Authority' when the necessary 'Application seeking appropriate relief is filed by the concerned party and further that said 'Authority' shall determine the said 'Application' on merits, of c....
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....l debt and the Adjudicating Authority has rightly rejected the Application. It is submitted that the said amount was advanced by the Appellant as per clause 7 of the LOI which was equal to three months' rental which was to be paid within seven days. It is submitted that out of Rs.48 Lakhs, Rs.8 Lakhs was maintenance charge, hence, three months' rent at the rate of Rs.40 Lakhs comes to Rs. 1.2 Crores which was the amount paid by the Appellant. It is submitted that the Appellant has not made any request for refund of the amount as per Clause of the LOI and Respondent has incurred expenditure for arranging premises for the Appellant. 8. We have considered the submissions of the Counsel for the Appellant and perused the record. 9. Section....
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....led to notice clause(f) of Section 5(8), in terms whereof 'financial debt' includes any amount raised under any other transaction, having the commercial effect of borrowing." 12. There can be no quarrel to the preposition laid down by the Hon'ble Supreme Court in the aforesaid judgment. The use of the word 'if any' clearly makes that it is not essential for all financial debt to be with interest. However, the essential condition which is required to be fulfilled for a debt to be a financial debt is "disbursement for time value of money" which has to be fulfilled for all transactions referred to in clauses (a) to (f) in sub-section (8) of Section 5 of the Code. 13. Learned Counsel for the Appellant has next relied on the judgment of "P....