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2020 (7) TMI 678 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - default in repayment of outstanding loan amount - scope of financial debt - conflict between the provisions of the IBC, 2016 and the Tea Act, 1953 - HELD THAT:-The term "finance account" has been defined as the account relating to the temporary finance granted by the lender to the corporate debtor. It has also been mentioned that a resolution under section 293(1)(d) of the Companies Act, 1956 had been passed by the shareholders of the corporate debtor to enable the company and its directors to borrow loans not exceeding ₹ 1,200 crores and avail of temporary finance within the limit of borrowing of the corporate debtor-company. It is also mentioned that the financial creditors were approached by the corporate debtor. It is also mentioned that disbursement could be made in intervals/instalments. The broker is also nominated by the corporate debtor. Interest element also exists. Further, the financial creditors are not in the business of purchase and sale of tea. When we see these terms and conditions, we are totally amused as to on what basis the corporate debtor could claim that this is a transaction of sale and purchase of tea and not of financing. There are no substance in the plea of the corporate debtor that it is not a financial debt within the meaning of section 5(8) of the IBC, 2016 for the simple reason that it also carries interest, whereas, in our considered opinion, if the money is given even without interest, still it has time value of money as it results into an economic advantage to the borrower at free of cost over a period of time when the value of money decreases due to inflation. The transactions of loan/advance are specifically covered under section 5(8)(a) as these have been borrowed against interest. Even, considering the fact of repayment of loan to one of the financial creditors and other surrounding circumstances as well, such claim made by the corporate debtor appears to be of no help particularly when no other material/documentary evidence has been brought on record to show that the tenure of the loan has been extended. Thus, in the background of the facts and circumstances and applicable legal position, as discussed herein above, we are of the considered view that the transaction is of the nature of financial debt within the meaning of provisions of section 5(8) and 5(8)(a) of the IBC, 2016. As per section 5(8)(f) of the IBC, 2016, this transaction has got the trappings of commercial effect of borrowing, hence, for this reason also this is a financial debt. The petition is complete and defect-free - application admitted - moratorium declared.
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