2025 (7) TMI 710 - SCH - IBC

Seeking dismissal of Section 7 application filed by the Appellant seeking initiation of Corporate Insolvency Resolution Proceedings (CIRP) of the Respondent-Corporate Debtor - credit facility provided by the Appellant to the Respondent was in the nature of a financial debt falling within the meaning of Section 5(8) of the IBC or not - it was held by NCLAT that the infusion of funds by the Appellant constituted a financial debt under the IBC and the Appellant was a financial creditor entitled to file a Section 7 application. The absence of an interest clause does not preclude a transaction from being a financial debt if it has the commercial effect of borrowing - HELD THAT - There are no no good reason to interfere with the impugned order - the civil appeal is dismissed.

Summary

The Supreme Court, through Hon'ble Justices J. B. Pardiwala and R. Mahadevan, reviewed the appeal against the National Company Law Appellate Tribunal's order dated 19-2-2025 in Company Appeal (AT) (Ins.) No.1427 of 2023. After considering the submissions and materials, the Court found "no good reason to interfere with the impugned order." Consequently, the Civil Appeal was dismissed, and all pending applications were disposed of.