TaxTMI 
TaxTMI 
2023 (3) TMI 1213
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....Anshula Grover, Mr. Ivo D'Costa, Ms. Rashika Narain, Mr. Avinash Mathews, Ms. Nitika Grover, Advocates JUDGMENT Per : Justice Rakesh Kumar Jain : This order shall dispose of two appeals bearing Company Appeal (AT) (Ins) No. 572 of 2022 titled as 'Minions Ventures Pvt. Ltd. Vs. TDT Copper Ltd.' (hereinafter referred as 'Appeal No. 1') and Company Appeal (AT) (Ins) No. 780 of 2022 titled as 'V.R Ashok Rao & Ors. Vs. TDT Copper Ltd.' (hereinafter referred as 'Appeal No. 2') as both the appeals have been filed against the same impugned order dated 11.03.2022 passed in CP (IB) No. 1093(ND)/2020 by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench - V) by which application filed by the Appellants in appeal no. 2....
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....invoice discounting/reverse invoice discounting platform. Pursuant to which, the Appellants in the second appeal, Corporate Debtor, Seller and the Appellant in the first appeal executed a separate and independent 'Agreement for Creation of Rights (COR) for creating rights in the receivables under the invoices in favour of the Appellants in the second appeal. It is further alleged that after the execution of the COR Agreements, the Appellants in the second appeal discounted the invoices and deposited the amounts in an escrow account maintained by KredX with Yes Bank Ltd. and the said amount was transferred to the account of the Seller as a result of which, the liability of the Corporate Debtor towards Seller stood extinguished and the Corpor....
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....l be considered as an operational creditor to the extent of such assignment or legal transfer. Therefore, though the applicants may be the Operational creditor(s) but in terms of Section 5 (7), Part II of the IBC, 2016, the applicants cannot be treated as the financial creditor(s). 37. Hence, we are of the considered view, the present application filed under Section 7 of IBC is not maintainable and on this score alone, the application is liable to be dismissed. Since, we held that the present application is not maintainable under Section 7 IBC, therefore, it is needless to consider the other submissions raised on behalf of the respondent on the point of maintainability of the application. 38. In sequel to the above, we hav....
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....tion filed by the Appellants in the second appeal under Section 7 of the Code has rightly been held to be not maintainable and were rightly relegated to avail their remedy of filing the application under Section 9 of the Code. 6. Counsel for the Appellant has submitted that the Appellants are the Financial Creditors of the Corporate Debtor in view of Section 5(7) of the Code and the amount disbursed by them constitutes financial debt under Section 5(8)(e) of the Code. 7. Before proceeding further, it would be relevant to refer to Section 5(7) and 5(8)(e) of the Code. Section 5(7) 'Financial Creditor' means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. S....
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....as no such disbursement has been made to the Corporate Debtor by the Appellants/Financiers. It is submitted that the case is not covered by Section 5(8)(e) but Section 5(20) and 21(5) of the Code. Section 5(20) and 21(5) of the Code are reproduced as under:- "5(20)."operational creditor" means a person to whom an operational debt is owed and includes any person to whom such debt has been legally assigned or transferred; 21(5). Where an operational creditor has assigned or legally transferred any operational debt to a financial creditor, the assignee or transferee shall be considered as an operational creditor to the extent of such assignment or legal transfer." 11. According to the Respondent the amount was never disbur....
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....ntioned that 'pursuant to the mutual agreement between the parties, the Seller has agreed for discounting of invoices of the Customer for the creation of the right and interest in the invoice receivables in favour of the Financier. He has further referred to Clause 2.1 wherein it has been mentioned that the Seller has consented to the creation of the right and interest in the invoice receivables in favour of the Financier for the consideration. 12. We have heard Counsel for the parties and perused the record. 13. The Agreement (COR) was entered into between the Seller, Financier and the Corporate Debtor (As customer). As per the agreement, the Seller had agreed for discounting of invoice of the customer (CD) for the creation of the ri....