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TMI Blog2024 (9) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... on 7 of the IBC, 2016 by the appellant herein was dismissed on the ground (a) there is no evidence to show the loan given to the Corporate Debtor was due and payable; (b) there is no record of default or demand letter placed by the Financial Creditor to show debt and default and thirdly (c) failure of settlement between the parties has led to the initiation of Section 7 petition which is an abuse of process of law. 2. We have heard the arguments advanced by the learned counsel and perused the material available on record. Admittedly as to the Balance Sheets of the year 2019-20 and 2020-2021, the loan given by the appellant to an extent of Rs.1,26,89,350/- is shown as long term borrowing. Page 105 of the Paper Book is the Balance Sheet of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of contradiction that in such cases the amount taken by the Company is in the nature of a 'financial debt'. 4. Further in Rajesh Gupta V Dinesh Jain 2018 SCC Online NCLAT 412 this Tribunal held unsecured loans form part of financial debt under the Code. Para 3 of the said judgement is as under:- "It is apt to notice that the expression 'debt' defined under Section 3(11) means a liability obligation in respect of a claim which is due from any person and includes a financial debt and operational debt. Non-payment of such debt which has become due and payable and is not repaid by the Debtor or Corporate Debtor falls within the mischief of 'default' defined under Section 3(12) of I&B Code. It would therefore be futile on the part of le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise." 6. We have also perused the notice dated 22.07.2022 sent by the appellant to the Respondent; not disputed in reply filed to this appeal by the Respondent and in the said notice demand was raised requiring the debt due be paid within seven working days. Admittedly it has not been paid. Thus both the debt and default is prima facie revealed from the above documents. Even otherwise in Jayanthi G Ravi V Chemizol Additives (P) Ltd 2022 SCC OnLine NCLAT 916 the Court held as follows:- "50. It must be borne in mind that 'Financial Debt' under Section 5(8) of the I & B Code, is an inclusive definition and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, the application needs to be admitted unless it is incomplete, in which case, a notice to be given to the applicant to rectify the defects within seven days of receipt of notice from the Adjudicating Authority, per Innoventive Inds Ltd (supra). In Shobhnath & Ors Vs Prism Industrial Complex Ltd Manu/NOL/0353/2019, this Tribunal held the Adjudicating Authority is only required to ensure there is a debt and default on the basis of the record produced before it. 8. We have perused the record, Balance Sheets of the corporate debtor as also the legal notice of demand prima facie reveal there is no impediment to admit the petition under Section 7 of the Code against the Respondent/Corporate Debtor. 9. In the circumstances we allow the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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