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2021 (2) TMI 901 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - clear-cut stand of the Appellant is that the Adjudicating Authority (National Company Law Tribunal) had failed to take into consideration that the amount paid by the Applicants to the Respondent was clearly of Financial Debt - HELD THAT - It is to be pointed out that Section 3(11) of the Code defines Debt meaning a liability or obligation in respect of claim which is due from any person and includes a financial debt and operational debt . Section 3(12) of the Code defines default meaning non-payment of debt when whole of any part or instalment of the amount of debt has become due and payable and is not (paid) by the debtor or the corporate debtor as the case may be - It is to be remembered that for a default there must be a subsisting debt. After all the word default is like not doing something which one should do. In fact the term default refers to an omission or failure to perform a legal or contractual duty. Suffice it to point that the word default applies to a sum of money which was promised at a future date as against a sum now due and payable. It cannot be forgotten that Section 5(8) of the Insolvency Bankruptcy Code speaks of time value and these words are interpreted to mean compensation or the price paid for the length of time for which the money was disbursed. An existing obligation to pay a sum of money is the sine qua non of a financial debt . The Financial Creditor has a right to financial debt . Thus the essence of any debt to be mentioned as financial debt is the time value of money as borrowing money is for monetary transaction - To determine the plea of occurrence of default is the debt which must be due and become payable. An existence of debt and default are to be met for admission of an Application under section 7 of the Insolvency and Bankruptcy Code. A Debt is/was recoverable from the Corporate Debtor . There is no second opinion of an important fact that distinction between Deposits and Loans may not be a significant factor for interpreting the word Deposit . One cannot ignore a candid fact that maturity of claim default of claim or invocation of guarantee has no nexus in regard to the filing of claim before the Interim Resolution Professional under section 18(1)(b) of the Insolvency Bankruptcy Code and the Resolution Professional under section 25(2)(e) of the Code - As per the Companies (Acceptance of Deposits) Rules 2014 the term deposit is defined under rule 2(1) (c ) in an inclusive fashion. The meaning of deposit is elongated by covering receipts of money in any other form. For approaching the jurisdiction of the Tribunal as per Section 74(2) of the Companies Act 2013 even a partial failure by the Company to repay the deposit was sufficient. Resting on the fact that the Respondent / Corporate Debtor under the Recurring Investment Plan had assured to provide the Investors interest on their investment sum along with the Investment amount for the time value of money (of course based on the amounts of investments made by the Investors) and in view of the fact that the Respondent / Corporate Debtor failed in its commitment to offer the allotment and/or the possession of the Plots of Land as promised by it or pay the assured returns or repay the sums collected by it along with interest on the maturity of the schemes etc this Tribunal comes to a consequent conclusion that the Appellant s position is that of a Financial Creditor as per Section 5(7) read with Section 5(8) of the Insolvency Bankruptcy Code and that there is default in payment of the accepted amounts by the Respondent / Corporate Debtor - the Respondent/ Corporate Debtor squarely comes within the ambit of definition of Financial Debt and the contra conclusions arrived at by the Adjudicating Authority (National Company Law Tribunal New Delhi Bench-V) to the effect that the amount which the applicants deposited does not come under the definition of Debt and further that it was unable to accept the contention of the applicants that there was a default in payment of debt are incorrect invalid and the same is set aside by this Tribunal to secure the ends of justice. The Impugned Order of the Adjudicating Authority (National Company Law Tribunal New Delhi Bench-V) is set aside by this Tribunal for the reasons ascribed in the instant Appeal - the Adjudicating Authority (National Company Law Tribunal New Delhi Bench-V) is directed to restore the Company Petition filed by the Appellants / Financial Creditors / Petitioner (under Section 7 of the Insolvency Bankruptcy Code ) to its file and admit the same and to proceed further in accordance with Law.
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