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2017 (3) TMI 151 - Tri - Insolvency and BankruptcyDefault in payment of the amount of "Assured Returns" - Insolvency process by invoking Section (7) of the Insolvency and Bankruptcy Code, 2016 - how the Applicants would be covered by the expression 'Financial Creditor' and the expression 'Financial Debt' within the meaning of the term used in Section 7 and Section 5(7) & (8) of the IBC.Held that:- When we examine the nature of transactions in the present case, we find that it is a pure and simple agreement of sale or purchase of a piece of property. The agreement to sell a flat or office space etc. Merely because some "assured amount" of return has been promised and it stands breached, such a transaction would not acquire the status of a 'financial debt' as the transaction does not have consideration for the time value of money, which is a substantive ingredient to be satisfied for fulfilling requirements of the expression 'Financial Debt'. Essentially in the case in hand 'Assured Returns' is associated with the delivery of possession of the aforementioned properties and has got nothing to do with the requirement of sub-section (8) of section 5. It is the consideration for the time value of money which is mercifully missing in the transaction in hand. The classical transaction which would cover the definition of financial debts is illustrated in sub-clause (a) of sub-section (8) of Section 5 i.e. the money borrowed against the payment of interest. Learned Counsel of Applicants has not been able to show from any material on record or otherwise that it is a financial transaction in which a debt has been disbursed against the consideration for the time value of money and he being the Financial Creditor is entitled to trigger the insolvency process against the Respondent in accordance with Section 7 of the IBC. Even otherwise the present petition would not be maintainable as many winding up petitions have been filed before Hon'ble Delhi High Court. Even the Official Liquidator has been appointed as a provisional liquidator although the matter is presently pending before the Appellate Bench with interim directions. As a sequel to the above discussions, we are unable to persuade ourselves to accept that the applicants are covered by the expression "Financial Creditor" in term. The arrears of "assured returns" would also not be covered by the expression 'financial debt'. Therefore the applicants do not answer the description of Section 7 read with Section 5(7) & 5(8) of IBC. The application is accordingly dismissed. The remedy of the Applicant may lie elsewhere. We make it clear before parting that any observations made in this order shall not be construed as an expression of opinion on the merit of the controversy as we have refrained from entertaining the application at the initial stage itself when the Respondents have not entered appearance and are not present before us. Therefore the right of the Applicants before any other forum shall not be prejudiced on account of dismissal of instant application.
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