Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2017 (9) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 1859 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Scope of Financial Debt - whether the amount claimed from the Respondent by the Applicant is a financial debt or not? - HELD THAT:- "Financial Debt", to the extent relevant for the purpose of this case, is defined in Clause (a) of sub-section (8) of Section 5 of the Code. It says, "financial debt" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes money borrowed against the payment of interest - it is clear that Unsecured Loans were given by the Applicant to the Respondent and in respect of which on interest amounts TDS at the rate of 10% was deducted. Therefore, the amount of debt due from the Respondent to the Applicant comes within the four corners of financial debt as defined in Clause (a) of sub-section (8) of Section 5 of the Code. Whether the default has been committed by the Respondent in respect of payment of the financial debt to the Applicant? - HELD THAT:- The very fact that the Respondent deducted tax on interest on loan amount shows that there is an outstanding debt, which is a financial debt due from the Respondent to the Applicant. Even assuming that Respondent is entitled for certain amounts from the Applicant, it can only be treated as a set off or counter-claim and it can not be a dispute relating to the financial debt due to the Applicant from the Respondent - On the ground that there is counter-claim or set off as pleaded by the Respondent, it cannot be said that there is no default in repayment of the financial debt. Therefore, this Adjudicating Authority is of the considered view that there is occurrence of default in payment of financial debt by the Respondent. It is contended by the learned counsel for the Respondent that columns at Serial Nos. 5, 6, and 8 of Part V of Form-I are not provided by the Applicant. It is stated in Column 5 of Part V as "Not Applicable". Since it is a case of Unsecured Loan from Applicant Company to the Respondent Company which reflects in the Statement of Account there is no financial contract and therefore it cannot be said that Column 5 is not answered by the Applicant. Column 6 refers to record of default. It is stated that it is "Not Applicable". Therefore, it cannot be said that Column 6 is not complied with - Coming to Column 8, Applicant has attached the documents that are available to show that financial debt is payable to it - the contention of the learned Counsel for the Respondent that the Application is incomplete in respect of Columns 5, 6 and 8 of Part V of Form-I does not merit acceptance. This Application deserves to be admitted and it is accordingly admitted under Section 7(5) of the Code - Application admitted - moratorium declared.
|