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TMI Blog2019 (10) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... y shown by the Adjudicating Authority. Further no ground has to be given as to why the claim of the Appellant has not Operational Debt . Appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that the observations made by the Adjudicating Authority is contradictory as at one stage, it is stated that the entire principal amount has been paid and at another stage it observed that the application is beyond the period of limitation. Learned counsel appearing on behalf of the Respondent submits that the total amount has been paid and the respondent has not raised the question of limitation. However, such submission cannot be accepted as the Adjudicating Authority has observed that the Appellant failed to explain the delay which pertains to the year 2012. We have noticed that by Demand Drafts of February, 2018, Respondent paid certain amount. In such case, we are of the view that the amount having last paid in February, 2018 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 5(7) as a person to whom a financial debt is owed and a financial debt is defined in Section 5(8) to mean a debt which is disbursed against consideration for the time value of money. As opposed to this, an operational creditor means a person to whom an operational debt is owed and an operational debt under Section 5(21) means a claim in respect of provision of goods or services. 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the Explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. 29. The scheme of Section 7 stands in contrast with the scheme under Section 8 where an operational creditor is, on the occurrence of a default, to first deliver a demand notice of the unpaid debt to the operational debtor in the manner provided in Section 8(1) of the Code. Under Section 8(2), the corporate debtor can, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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