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VRG Healthcare Pvt. Ltd. Vs. VRG Infrastructure Pvt Ltd - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (22 Mar 2023)

In order to qualify the debt to be a 'financial debt', it is necessary that the amount advanced to the Corporate Debtor is against the time value of money

MANU/NL/0209/2023

Insolvency

The instant Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) has been preferred by the Appellant being aggrieved and dissatisfied by the order passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) in Company Petition whereby petition under Section 7 of the IBC filed by Appellant with a prayer to initiate the Corporate Insolvency Resolution Process against Respondent herein - "VRG Infrastructure Private Limited (Corporate Debtor)" was dismissed holding that. the claim of the Petitioner is not a Financial Debt within the meaning of Section 5(8) of IBC.

The Impugned Order has clearly stated that there has been no disbursement, in the first instance, and consequently, consideration for time value of money is absent, the Appellant cannot seek to challenge the second observation without satisfying the preliminary challenge to his claim.

The Appellant has not produced any agreement between the Appellant and the Respondent that any interest would be payable by the Respondent/Corporate Debtor against the alleged loan. Further, the Adjudicating Authority rightly come to the conclusion that in order to qualify the debt to be a 'financial debt', it is necessary that the amount advanced to the Corporate Debtor is against the time value of money, which is totally absent in the present matter. Further, it was held that since the Appellant is not a financial creditor as the Appellant has not disbursed money against the consideration for the time value.

Accordingly, the claim of the Appellant is not a 'financial debt' within the meaning of Section 5(8) of the IBC. There is no merit in the Appeal to interfere with the order impugned passed by the Adjudicating Authority. The impugned order passed by the Adjudicating Authority is affirmed. Appeal dismissed.

Tags : RESOLUTION PROCESS   INITIATION   FINANCIAL DEBT  

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