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TMI Blog2018 (6) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... l creditor under the 'Appreciation Clause' as per that which upon payment of the entire consideration amount within the stipulated time of 3 years, the said amount was to be refunded back in exchange of the plot i.e. by returning the plot. 2.2 The Applicant / Financial Creditor also contends that in the said project the financial creditor, after making payment of the entire consideration amount, had the option to claim refund of the entire consideration along with appreciation in the form of interest. It is pertinent to mention that the refund is subject to return of the possession of plot. It is a method adopted by the Corporate Debtor to mobilize funds / raise finance from general public and open market as much lower rates that j what is offered by banking institutions without having the obligation to offer any security or collateral. It is for this reason that the corporate debtor had offered to repay back the amount along with appreciation and interest. 2.3 It is further contended, however, upon receiving the entire consideration amount the corporate debtor have refused to refund the money. The financial creditor contacted the Corporate Debtor on various occasions dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration for the 'time value of money' which is the primary ingredient that is required to be satisfied in order for an arrangement to qualify as 'Financial Debt and for the lender to qualify as a 'Financial Creditor', under the scheme of IBC." 6. The above said proposition is squarely applicable in the case in hand. Bearing in mind the above said proposition, it appears to us that the Corporate Debtor did not appear to defend his case and the application filed is complete and there is an occurrence of default. Therefore, the application filed under Section 7 of the I&B Code is liable to be admitted. 7. Heard the ld. Counsel for the applicant at length and perused the records. 8. The issue in hand is 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 I&B Code. According to the ld. Counsel, the default in payment of the amount of "Assured Returns" payable by the respondent would be sufficient to satisfy the requirement of Section 7 read with Section 5 (7) and (8) of the I&B Code. 9. In order to find out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes of this sub-section, a default includes a default in respect of financial debt owed not only to the applicant financial creditor but to any other financial creditor or corporate debtor. (2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. (3) The financial creditor shall, along with the application furnish - (a) record of the default recorded with the information regarding utility or such other record or evidence of default as may be specified; (b) the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Board. 11. From a bare perusal of Section 7 of the I&B Code, it is evident that the corporate insolvency process can be triggered by a "Financial Creditor" individually or jointly against a corporate debtor when default has occurred. The first question arises for consideration is as to who is a 'Financial Creditor'. In order to ascertain the meaning of that expression, we have to examine its definition as provided by Section 5 which is applicable to Part II. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complex financial instruments which may not provide a happy situation to decipher the true nature and meaning of a transaction. 13. Essentially in the case in hand 'Assured Returns' is associated with the delivery of possession of the aforementioned properties. 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. Ld. Counsel of Applicants has been able to show 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 .solvency process against the respondent in accordance with Section 7 of the I&B Code. 14. As held in Innoventive Industries Ltd. Vs. ICICI Bank (2017)139 CLA 335 by the Hon'ble NCLAT, this adjudicating authority if satisfied that there is occurrence of default and the application filed is complete, the application filed under Section 7 of the I&B Code is able to be admitted. Here, in this case, none of the objections of the Corporate Debtor is found s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions as may be notified by the Central Government in consultation with any financial sector regulator. The order of moratorium shall affect the date of such order till the completion of the corporate insolvency resolution process. Provided that where at any time during the corporate insolvency resolution process period, if the adjudicating authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, the moratorium shall cease to have effect from the date of such approval of liquidation order, as the case may be. Necessary public announcement as per Section 15 of the I&B Code, 2016 may be made. Mr. Manmohan Jhawar is appointed as Interim Resolution professional for ascertaining the particulars of creditors and convening A meeting of Committee of Creditors for evolving a resolution plan. The Interim Resolution Professional should convene a meeting of the Committee of Creditors and submit the resolution passed by the Committee of Creditors. 17. Let the certified copy of the order be issued upon compliance with requisite formalities and a copy of the order may also be sent to the Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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