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TMI Blog2018 (1) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... vency and Bankruptcy Code, 2016 (hereinafter referred to as the 'I&B Code') by the Adjudicating Authority admitted the application, passed order of moratorium with certain directions and called for the names of Interim Resolution Professionals and adjourned the matter for appointment of Interim Resolution Professional. In the second order dated 18th September, 2017 the Insolvency Resolution Professional has been appointed with further directions as given therein. 2. The relevant facts as pleaded are as follows: The erstwhile shareholder i.e. Shri Ashok Kumar Aggarwala and others approached M/s. Swan Aluminiums Private Limited (Corporate Debtor) for sale of their entire shareholding in M/s. Swan Aluminiums Pvt. Ltd. A Memorandum of Understanding was executed on 18th February, 2013 between M/s. Swan Aluminiums Pvt. Ltd. (Corporate Debtor) and Jupiter Strips Private Limited wherein certain agreements were reached. On 9th December, 2013, all bank accounts in the name of the company M/s. Swan Aluminiums Pvt. Ltd. (Corporate Debtor) were closed after clearance of all past/previous dues/liabilities, (both secured and unsecured) which was reflected in the balance-sheet prepared by the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court, and where the petition has not been served on the respondent as required under rule 26 of the Companies (Court) Rules, 1959 shall be transferred to the Bench of the Tribunal established under sub-section (4) of section 419 of the Act, exercising territorial jurisdiction and such petitions shall be treated as applications under sections 7, 8 or 9 of the Code, as the case may be, and dealt with in accordance with Part II of the Code: Provided that the petitioner shall submit all information, other than information forming part of the records transferred in accordance with Rule 7, required for admission of the petition under sections 7, 8 or 9 of the Code, as the case may be, including details of the proposed insolvency professional to the Tribunal within sixty days from date of this notification, failing which the petition shall abate. 2. All cases where opinion has been forwarded by Board for Industrial and Financial Reconstruction, for winding up of a company to a High Court and where no appeal is pending, the proceedings for winding up initiated under the Act, pursuant to section 20 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold on nonrecourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause;" 14. Learned counsel appearing on behalf of the respondent submits that the loan given by the respondent comes within the meaning of 'financial debt' as per clause (a) of sub-section(8) of Section 5 i.e. money borrowed against the payment of interest. However, there is nothing on record to suggest that M/s. Swan Aluminiums Pvt. Ltd. (Corporate Debtor) has borrowed money against the payment of interest from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession 'Time Value' has been defined to mean "the price associated with the length of time that an investor must wait until an investment matures or the related income is earned". In both the cases, the inflows and outflows are distanced by time and there is a compensation for time value of money. It is significant to notice that in order to satisfy the requirement of this provision, the financial transaction should be in the nature of debt and no equity has been implied by the opening words of Section 5(8) of the IBC. It is true that there are complex financial instruments which may not provide a happy situation to decphe1 the true nature and meaning of a transaction. It is pertinent to point out that the concept 'Financial Debt' as envisaged under Section 5(8) of the IBC is distinctly different than the one prevalent in England as provided in its Insolvency Act, 1986 and the 'Rules' framed thereunder. It appears that in England there is no exclusive element of disbursement of debt laced with the consideration for the time value of money. However, forward sale or purchase agreement as contemplated by Section-5 (8)(f) may or may not be regarded as a financia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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