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2019 (3) TMI 1192 - AT - Insolvency and BankruptcyCorporate insolvency process - existence of "financial debt" - unsecured loan outstanding - ‘debt’ and ‘default’ on the part of the ‘Corporate Debtor’ - whether the amount claimed by Respondent No. 1 is not a ‘Financial Debt’ within the meaning of Section 5(8) and Respondent No. 1 cannot be treated as a ‘Financial Creditor’ for the purposes of I&B Code? - HELD THAT:- The balance sheet as on 31st March, 2017 as of the reply affidavit filed by Respondent No.1, inter alia, reflects a non-current liability of ₹ 4,72,76,182/- treated as ‘long term borrowings’ and not treated as shareholder’s funds. Same factual position is reflected in the communication made by the Company Auditor ‘Ganesh Mehta’, Partner ‘Ganesh and Rajendra Associates’ addressed to Respondent No.1 in his communication dated 5th December, 2017 forming Annexure D to the reply affidavit of Respondent no.1. Communication reflects total unsecured loan of ₹ 4,72,76,182/- against the Corporate Debtor in the books of the Company as on 31st March, 2017, the breakup showing the loan amount of ₹ 1,45,36,475/- in the name of Respondent No.1. In the face of this documentary evidence it is abundantly clear that the amount disbursed by Respondent No.1 to the Corporate Debtor was in the nature of debt treated as long term loan and not as an investment in the nature of share capital or equity. Such disbursement cannot either be treated as largesse. We are convinced that the aforesaid amount outstanding as against Corporate Debtor, default whereof is not in issue, has all the trappings of a ‘financial debt’ and falls within the purview of Section 5(8)(f) of the I&B Code and Respondent No.1 is covered by the definition of ‘Financial Creditor’. Appeal dismissed.
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