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2019 (3) TMI 1188 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCHCorporate insolvency process - existence of financial debt - occurrence of default - whether Petition filed on Form No.1 in the capacity of a Financial Creditor is bad in law? - whether the arrangement between the Petitioner and Respondent as recorded in the letter dated 20.08.2009, did not involve any “disbursement against the consideration for the time value of money”? - HELD THAT:- In addition to the conventional borrowings where a lender has advanced a sum of money to a borrower against the payment of interest and disbursed the money against the consideration for the time value of money, this definition has also included all those transactions which are not having the element of physical transfer of money from the hand of the lender to the account of the borrower. Thus, the “disbursement” as well as element of “interest” are not the two conditions sine-quo-non so as to fall within the ambits of the definition of 'Financial Debt'. Those transactions where an amount is raised having commercial effect of a borrowing are also coming within this definition. Other transactions such as “derivative transaction” or “counter indemnity obligation” or “value” of a transaction, may be calculated on the basis of market value and to be taken into account for the purpose of claim of “Financial Debt”. In the light of the above discussion and on due perusal of the documents annexed, the Debt is to be qualified as “Financial Debt” as defined under section 5(8) of Insolvency & Bankruptcy Code, 2016. As a result, the Financial Creditor has filed this Application for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Since this is a Petition of “Financial Creditor”, therefore, the Insolvency Process shall commence as prescribed under Section 7 of IBC, 2016. The occurrence of “default” is established. The Financial Debtor had failed to pay the amounts due. Debt in question is a 'Financial Debt' and that the occurrence of 'default' is recognized, hence considering the state of affairs mentioned supra the Petition under consideration deserves to be “Admitted”.
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