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2018 (9) TMI 1530 - Tri - Insolvency and BankruptcyCorporate Insolvency Resolution Process - applicants satisfy that they come within the definition of “Financial Creditor” - existence of financial debt - Held that:- The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the “Financial Creditor” is delineated under Section 7 of the Code, wherein only “Financial Creditor”/”Financial Creditors” can file an application. As per Section 7(1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. Section 7 of the Code thus mandates that only the applicant “Financial Creditor” has to prove the default. Even if there is a clear default, the application under Section 7 of the Code is not maintainable in case the applicant is not a financial creditor. Therefore, in order to maintain the present application filed under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor, the present applicants have to satisfy that they come within the definition of “Financial Creditor”. There is no document to show that the respondent company either accepted or undertook to repay the loan with interest. The applicant has failed to justify how without any provision of interest the debt can be termed as a financial debt. Once the claim made in the application does not pertain to ‘disbursement against consideration for time value of money’, the present claim will not come within the purview of ‘Financial Debt’ and consequently the applicants cannot be termed as ‘Financial Creditor’ in respect of the present claim in question. The onus to prove lies on the applicants to establish that ‘interest’ is payable on the loan amount as claimed in the present application. The burden of proof becomes more onerous particularly when the claim is disputed. It is reiterated that neither any document has been placed on record pertaining to the loan nor there is any supporting evidence to establish applicable rate of interest to be paid on the said loan. Therefore, the applicants miserably failed to substantiate that the amount was disbursed against the consideration for time value of money with supporting documentary evidence nor could satisfactorily repudiate the contention of the respondent. Mere pleading of the applicants in the absence supporting documentary evidence will not suffice to prove that the disbursements were made for time value of money. Therefore, neither the present claim can be termed to be a ‘financial debt’ nor does the applicants come within the meaning of ‘financial creditors'. Once the applicants do not come within the meaning of ‘financial creditors’, they become ineligible to file the application under Section 7 of the Code. Petition dismissed as not maintainable.
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