TaxTMI 
TaxTMI 
2026 (5) TMI 769
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....nkruptcy Code, 2016 ('IBC' in short) arising out of the Order dated 04.03.2025 (hereinafter referred to as the 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court - V) in I.A No. 1674 of 2024 in CP (IB) No. 106/MB/2022. By the said impugned order, the Adjudicating Authority has dismissed I.A No. 1674 of 2024 filed by the Appellant - Amisha In Sky Creation Pvt. Ltd. ('Amisha' in short) and rejected the claim filed by them, aggrieved by which order rejecting their claim, Company Appeal No. 578 of 2025 has been preferred by Amisha. The other appeal vide Company Appeal No. 640 of 2025 has been preferred by Resolution Professional ('RP' in short) challenging the impugned order for according the status of secured financial creditor to Amisha. 2. Coming to the salient facts of the case which are relevant to be noticed for consideration of both the appeals at hand, it is noted that the Corporate Debtor - M/s Setubandhan Infrastructure Ltd. (formerly known as "Prakash Constrowell Ltd") was admitted into the Corporate Insolvency Resolution Process ('CIRP' in short). The Corporate Debtor before being admitted into the CIRP had obtained....
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....ejection of their claim as unsecured financial creditor by the RP. The Adjudicating Authority dismissed the I.A No. 1674 of 2024 on 04.03.2025. However, while dismissing I.A No. 1674 of 2024 and rejecting the claim of Amisha, the Adjudicating Authority reclassified Amisha as a secured financial creditor. Aggrieved by the impugned order, Amisha has preferred CA(AT)(Ins) No. 578 of 2025 challenging the rejection of its claim while a cross appeal has been filed by the RP vide CA(AT)(Ins) No. 640 of 2025 challenging the categorisation of Amisha as a secured financial creditor by the Adjudicating Authority. 3. Since, the facts in both the appeals are same, we propose to deal with both the appeals together and propose to apply our findings after outlining the common issues. 4. Making submissions on behalf of Amisha, Shri Rachit Mittal, Ld. Counsel submitted that the impugned order was not sustainable in the eyes of law as it dismissed I.A No. 1674 of 2024 on the ground of belated submission of claim in utter disregard of the fact that the RP had rejected the claim of Amisha not on the ground of delay but on merit. Submission was pressed that the RP had rejected the claim of Amisha ....
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....sha, Shri Krishnendu Dutta, Ld. Sr. Counsel for the Respondent - RP submitted that the though the Adjudicating Authority had correctly rejected the claim of Amisha, it erroneously recategorized Amisha as a secured financial creditor at a time when no such plea or prayer to this effect had even been made by Amisha. Amisha had also not disbursed any funds to the Corporate Debtor which was essential to fulfil the test of a financial creditor. On the interest component @ 1.5% per month which Amisha was purportedly entitled to receive from the Corporate Debtor on the money borrowed by the Corporate Debtor from SBI as per the Deed of Agreement, it was contended that this did not reflect consideration of time value for money or showed commercial effect of borrowing since Amisha had received certain post-dated cheques towards its payments for mortgaging its property, which cheques are in the nature of fees for lending its property. It was further submitted that the Corporate Debtor vide email dated 16.10.2019 had disputed the validity of the Agreement dated 09.08.2016 claiming that it was executed without proper board authority and not properly registered besides involving a related party ....
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.... b) In the alternative to (a), this Hon'ble Tribunal be pleased to direct the Respondent No. 1 to admit the claim of the Applicant to the tune of INR 51,28,95,561 (Indian Rupees Fifty-One Crores Twenty-Eight Lakhs Ninety Five Thousand Five Hundred and Sixty-One Only), i.e. the Interest Amount as a financial creditor, details of which are provided in the particulars of claim; c) This Hon'ble Tribunal be pleased to quash and set-aside all decision of the CoC since its formation, including resolution dated 26 December 2023, under which the Resolution Plan in respect of the Corporate Debtor came to be approved; d) This Hon'ble Tribunal be pleased to direct the Respondent No. 1 to form Committee of Creditors in respect of the Corporate Debtor, including Applicant as a financial creditor and only thereafter commence the process of Corporate Insolvency Resolution Process against the Corporate Debtor, including inviting proposals/ Resolution Plan; e) Pending hearing and final disposal of the present application, this Hon'ble Tribunal be pleased to stay the IA No. IA(IBC)(Plan) -7 of 2024, filed by Respondent No. 1 seeking approval of the R....
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....t of debt. The RP had failed in its duty to consider the interest component and compensation payable to Amisha by the Corporate Debtor in terms of the Deed of Agreement which clearly demonstrated the consideration of time value for money and the commercial effect of borrowing. It was also contended by Amisha that since Clause 9 of the Deed of Agreement provided that interest was payable by the Corporate Debtor to Amisha for use of their property to secure the loan amount from SBI, the Adjudicating Authority had correctly held that there was consideration for time value of money and hence, this amounted to be a financial debt in terms of Section 5(8) of the IBC. Since there was a return in the form of interest payments for allowing their property to be used, it demonstrated commercial effect of borrowing. Furthermore, since the Corporate Debtor had agreed to indemnify Amisha against all losses and damages, this further substantiated the fact that Amisha was a secured financial creditor qua the Corporate Debtor in terms of Section 5(7) of the IBC. 12. Per contra, it is the contention of the RP that Amisha has not been able to show that it had disbursed any funds to the Corporate D....
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....t) 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 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;" 14. It would also be instructive to glance at one of the celebrated judgments of the Hon'ble Supreme Court as in Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited Vs. Axis Bank Ltd. & Ors. (2020) 8 SCC 401 which has lucidly explained the concept of financial debt. This judgement has also been relied upon by the RP. In this judgment, the Hon'ble Apex Court while examining the definition of Financial Debt under Section 5(8) of the IBC emphasised that the essential elements of financial debt is disbursement against time-value of mo....
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....s owed to that person. He may be the principal creditor to whom the financial debt is owed or he may be an assignee in terms of extended meaning of this definition but, and nevertheless, the requirement of existence of a debt being owed is not forsaken. (Emphasis supplied) In the same vein, the RP has also adverted to another judgement of this Tribunal in Ascot Realty Private Limited Vs. Ajay Kumar Agarwal and Others, CA(AT) (Ins) No. 658 of 2020 which also held in para 23 therein that for a debt to become 'financial debt' for the purpose of Part II of the IBC, the basic elements are that it ought to be a disbursal against the consideration for time value of money and that the root requirements of 'disbursement' against 'the consideration for the time value of money' cannot be forsaken. 15. Having taken cognizance of the statutory provisions of IBC and the landmark judgement of the Hon'ble Apex Court and the judgement of this Tribunal echoing the same, we can safely conclude that for any debt to be treated as financial debt, the pre-requisite is disbursal of money to the borrower for utilization by the borrower and that the disbursal must be against consideration for time ....
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.... a case where there has been any disbursal of monies by Amisha to the Corporate Debtor. This is admittedly a case where there has been only a set of properties which have been allowed by Amisha to be used as collateral for credit disbursed by SBI to the Corporate Debtor. This mortgage of property cannot assume the character of disbursal of financial debt in terms of Section 5(8) of IBC. It may not be out of place to mention that the Hon'ble Supreme Court in New Okhla Industries Development Authority Vs. Anand Sonbhadra, (2023) 1 SCC 724 has categorically held that disbursement is an indispensable requirement to constitute a financial debt within the meaning of Section 5(8) and that disbursement must be from the creditor to debtor and therefore while considering the lease which was the subject matter therein it was held that there has been no disbursement of any debt (loan) or any sums by the lessor therein to the lessee. This ratio is also applicable in this case and hence mortgage of properties by Amisha does not meet the test of treatment as a financial debt in terms of Section 5(8) of the IBC. Having come to the above conclusion that the transaction in question of mortgage of pr....
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....nexure 2 which shows interest workings separately. 3. From the documents submitted, it cannot be inferred that there exists financial debt. I am therefore not accepting your claim which you may kindly note." The second time when the RP rejected the claim on 18.05.2023, it has been noticed by the Adjudicating Authority that he had taken the stand that the claim was not admissible in view of the legal opinion provided by our legal advisors which legal opinion according to the Adjudicating Authority has not been placed on record. 22. Now that we have noticed the grounds for rejection of the claim by the RP, we now proceed to look at the Claim Form which was submitted by Amisha which is as reproduced hereunder: FORM C SUBMISSION OF CLAIM BY FINANCIAL CREDITORS Date - 09/01/2023 Subject: Submission of claim and proof of claim. Madam/Sir, I, Amisha In Sky Creation Pvt. Ltd., hereby submits this claim in respect of the corporate insolvency resolution process of Setubandhan Infrastructure Limited (formerly known as Prakash Constrowell Limited). The details for the same are set out below: Relevant Particulars (1) ....
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....he status of secured financial creditor but the Adjudicating Authority on its own has held them to be a secured financial creditor. And it is only at the stage of filing appeal before this Tribunal that now Amisha has contended for the first time that it was a secured financial creditor. We have already dealt with this aspect and come to the conclusion for reasons already elaborated as to why this transaction did not amount to be a financial debt in terms of Section 5(8) of the IBC and that Amisha cannot claim the status of a secured financial creditor. We have therefore no hesitation in holding that the impugned order suffers from grave infirmity in holding Amisha to be a secured financial creditor. 25. But while we have already come to the considered opinion that Amisha does not qualify to be treated as a secured financial creditor, we also cannot lose sight of the fact that in pursuance of the Deed of Agreement, Amisha had mortgaged it's properties to secure the loan of the Corporate Debtor and in return was to receive interest @1.5% per month. Furthermore, in this case the Corporate Debtor had already provided cheques to Amisha to secure their debt as is evident from Clause ....
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....the judgement of the Hon'ble Apex Court in RPS Infrastructure judgement supra has ordered rejection of the claims. 28. We have no quarrels with the proposition of law laid down by judgement of the Hon'ble Apex Court in RPS Infrastructure judgement supra that claims may not be accepted after the plan is approved by the CoC to avoid unleashing of hydra-headed monster of undecided claims on the resolution applicant. But this is not a case where the claim was filed belatedly. Claim was filed by Amisha within 90 days from the date of invitation of claims. Thereafter the rejection of the claim in the first question was being pursued in serious earnest. Thus, there was no overt delay in filing claims for the first time and even the delay, if any, in the challenge to the first-time rejection before the RP was neither intentional nor deliberate. Moreover, the facts of this case are distinguishable from the facts of the RPS Infrastructure matter as in this case the claims had been filed in time within 90 days for the first time and the second time too, the file was claimed much before the approval of the plan by the CoC. IBC is a beneficial legislation intended to inter-alia secure equita....