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2021 (1) TMI 1059 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Scope of the term 'Deposit' - Financial Debt under section 5(8)(a) and Section 5(8)(f) of the ‘I&B’ Code - stand of the Appellant is that his claim is that of a ‘Deposit’ and not of a ‘Financial Debt’ was never brought out by either the Respondent or the Adjudicating Authority as such, the Appellant never got an opportunity to respond to the said issue and was shocked by the impugned order - HELD THAT:- It must be borne in mind that a ‘Financial Creditor’ is a person to whom the financial debt is owed. A ‘Financial Creditor’ is a person who has a right to financial debt. A ‘Financial Creditor’ can be either a secured creditor or an unsecured creditor - A ‘Corporate Debtor’ is a person who owes a debt to any person. The term ‘debt’ means a liability or an obligation in respect of a claim due from any person and includes (i) a Financial Debt (ii) An Operational Debt. As a matter of fact, Section 3(6) of the Code speaks of ‘Definition of Claim’ meaning (a) a right to payment, whether or not such right is reduced to judgement, fixed, disputed, undisputed, legal, equitable, secured or unsecured. It cannot be gainsaid that the term ‘deposit’ includes any receipt of money by a company either as deposit or loan or in any other form by it. Under the Companies (acceptance of deposits) Rules, 2014 the term ‘Deposit’ is defined under Rule 2(1)(c) in an inclusive manner. The meaning of ‘Deposit’ is enlarged by covering receipts of money in any other form. After all, a deposit is something more than a mere loan of money - For invoking the jurisdiction of the Tribunal as per Section 74(2) under the Companies Act, 2013, even a partial failure by the Company to repay the deposit was sufficient. In fact, Section 2(31) of the Companies Act speaks of the meaning of deposit. Also, that the Tribunal has vide discretionary powers regarding the repayment of ‘Deposit’(s) but it must exercise its discretion objectively taking into consideration all the relevant aspects in a conspectus judicial manner. In reality, the distinction between deposit and loan may not be a relevant factor for interpreting the term ‘Deposit’. To put it succinctly, under the new Companies Act, 2013, the definition of the term ‘Deposit’ is of wider amplitude, as opined by this Tribunal. In view of the fact that the Respondent / Corporate Debtor had accepted certain amounts from the Appellant and credited the interest in a consistent manner against such amounts for a continuous period of five years, as pleaded by the Appellant and also that the ‘Corporate Debtor’ had accepted money from the Appellant against the payment of interest and bearing in mind the payment of interest on the amounts borrowed by the Respondent Company is nothing but a consideration for the time value of money and in as much as the ‘interest’ is the compensation paid by the borrower to the lender for using the lender’s money over a period of time, this Tribunal comes to an inevitable and inescapable conclusion that the Appellant’s status is that of a ‘Financial Creditor’ as per Section 5(7) read with Section 5(8) of the Code and that there is a default in payment of the accepted amounts by the Respondent/CD and in short, the Respondent / Corporate Debtor comes within the purview of the definition of ‘Financial Debt’ - the contra view taken by the Adjudicating Authority in coming to the conclusion that the application filed by the Appellant / Financial Creditor is not maintainable for initiation of Section 7 of the Code is clearly unsustainable in the eye of law, as held by this Tribunal, to prevent an aberration of justice. Appeal allowed.
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