TMI Blog2019 (3) TMI 1663X X X X Extracts X X X X X X X X Extracts X X X X ..... only the present claim comes within the purview of 'Financial Debt' but also the applicant being the assignee can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. The present application under Section 7 of the Code for initiative Corporate Resolution Insolvency Process has been filed by petitioner financial creditor in Form-1 in terms of Rule 4 of Insolvency and Bankruptcy (application to Adjudicating Authority) Rules, 2016 accompanied with required information, documents and records as prescribed under the Rules - There appears to be no infirmity in the application form, being complete in all respect. In terms of Section 7 (5) (a) of the Code, the present application is admitted. - COMPANY PETITION (IB) NO. 866-(PB)/2018 - - - Dated:- 15-3-2019 - JUSTICE (RTD.) M.M. KUMAR, PRESIDENT AND AND MRS. INA MALHOTRA, MEMBER (JUDICIAL) For The Petitioner : Mr Sanjay Bhatt, Advocate For The Respondent : Mr Gaurav Malik, Mr. Gurkamal Hora Arora And Mr Arjun Sehgal, Advocates ORDER M.M. Kumar, Hon'ble President. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... professional and has signed a communication dated 14.05.2018 in Form 2 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or elsewhere. In addition, further necessary disclosures have been made by Mr. Rajender Kumar Girdhar as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7(3)(b) of the Code. 5. It is the case of the applicant that the Respondent Corporate Debtor had availed various loan facilities from Exim Bank since the year 1998. 6. It is alleged that the respondent corporate debtor defaulted in repayment of dues of the Exim Bank and accordingly, the Exim Bank in terms of the RBI guidelines declared the account of the Corporate Debtor as a Non-Performing Asset. 7. It is further stated that due to failure on part of the Corporate Debtor to discharge its liabilities, the Exim Bank had filed recovery petition before DRT Delhi Mumbai against the respondent. It is also asserted that a consent dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The respondent company has also challenged the deed of assignment executed by Exim Bank in favour of the applicant M/s. Edelweiss Asset Reconstruction Company Limited. It is also alleged that applicant does not come within the purview of financial creditor . 18. In this regard applicant has submitted in its rejoinder that the assignment deed has been duly stamped and registered with the registering authority in Noida. It is further submitted that the Assignment Deed is fully legal and valid. That apart under sub-section (7) of Section 5 of the Code financial creditor includes a person to whom financial debt has been legally assigned or transferred to. In the present case as the outstanding loan amount has been duly assigned from Exim Bank to the present applicant; the applicant clearly comes within the definition of financial creditor . 19. The corporate debtor has also alleged that excess interest has been charged by the banks and the amount claimed is incorrect. It is pertinent to mention in this regard that dispute over the quantum of default, cannot be a ground for rejection of an application under Section 7 of Code as the determination of qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inancial debt have been defined in Section 5 (7) and 5 (8) of the Code and precisely Financial debt is a debt along with interest, if any, which is disbursed against the consideration for time value of money. 25. In the present case Exim Bank had sanctioned and disbursed the loan amount recoverable with applicable interest by entering into loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. The outstanding debts have since been assigned in favour of the applicant. Moreover, the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of 'Financial Debt' but also the applicant being the assignee can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code. 26. The application filed by the applicant financial creditor under sub-section 5 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of Section 14 of the Code. The necessary consequences of imposing the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) (d) of the Code. Thus, the following prohibitions are imposed: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. 33. It is made clear that the provisions of moratorium shall not apply to transactions which might be notified by the Cen ..... 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