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2021 (1) TMI 611 - Tri - Insolvency and BankruptcyClassification of Debt - Financial Debt of Operational Debt - payment of advanced money for receivable of gold stock and jewellery in future was arrangement between the Applicant and Corporate Debtor - Novation of contract between parties - Preferential Transactions or not - HELD THAT:- In terms of Section 43 (2) (a) the Corporate Debtor by virtue of executing a loan agreement dated 15.04.2019 has converted operational debt into a financial debt, with an intention to prefer the creditor and to put him in a beneficial position that he could have been in the event of distribution of asset in according with section 53 of IBC - this sort of arrangement could not have been done in its ordinary course of business, an Operational Creditor who advanced money with an intention of buying gold was treated as a lender under the Loan Agreement dated 15.04.2019. Looking at the facts of the present case that the CIRP against the Corporate Debtor commenced on 13.11.2019, the Loan Agreement dated 15.04.2019 executed by the Corporate Debtor, substituting the earlier MOU dated 07.03.2017 between the same parties, was created, seven months prior to CIRP, it is concluded that this arrangement is a preferential transaction in terms of Sec 43 (2)(a) of Code and is well within the two years look back period as prescribed by the code. Therefore, this bench declares that Resolution Professional has rightly rejected the claim of Financial Creditor, but has not filed any application under sec.43 for avoidance of transaction, this bench has Suo Moto considered the facts and gravity of the transaction to the extent of conversion of Operational Debt to financial debt for the benefit of the operational creditor and thus treated the transaction dated 15.04.2019 to be a preferential transaction. Application dismissed.
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