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TMI Blog2020 (10) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the advancement of money and have to ascertain whether the money is advanced for financial return or for supply of goods and services. There are transactions where the Petitioner is the purchaser of goods from the Corporate Debtor. There are no documents to show the money is advanced purely as a financial transaction notwithstanding the fact that the Corporate Debtor is a supplier of goods to the petitioner. The petitioner is the dominus litis and the onus probandi lies on the petitioner to establish the crucial ingredient of time value of money, as required under section 5(8) of the Code and the judicial pronouncements discussed in the transaction under consideration. But the petitioner failed on this count. Hence, the amount claimed is not a financial debt. Petition dismissed. - CP (IB) 3444/MB/2019 - - - Dated:- 28-7-2020 - Hon ble Member ( Judicial ) , Smt. Suchitra Kanuparthi And Hon ble Member ( Technical ) , Shri. V. Nallasenapathy For the Petitioner : Dr. S. K. Jain , PCS a/w. Advocate Yahya Batatawala For the Respondent : Advocate Haresh Makwane ORDER Per : V. Nallasenapathy , Member ( Technical ) 1. This Company Petition is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : MMPLH- 02/16-17 0 3124800 3124800 19/8/16 001015 Ag. Bill No..: MMPLH-02/16-17 021 264 1500000 0 1624800 22/8/16 001031 Ag. Bill No..: MMPLH-02/16-17 021 282 500000 0 1124800 29/8/16 001081 Ag. Bill No..: MMPLH-02/16-17 028 338 800000 0 324800 23/9/16 001299 Ag.Bill No..:MMPLH- 02/16-17 028 492 324800 0 0 3/10/16 001468 001 244 200000 0 200000 2/12/16 00767A Bill No..: MMPL- 04/16-17 0 159600 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submits that three cheques issued by the Corporate Debtor for ₹ 6,00,000/-, ₹ 6,00,000/- and ₹ 5,11,600/- were returned with an endorsement Account Blocked on 11.07.2019 and a criminal complaint preferred by the Petitioner on 24.12.2019 on the file of the Second Metropolitan Magistrate Court at Vikhroli, under Section 138, 141 and 142 of Negotiable Instrument Act, 1881, is pending. 5. The Corporate Debtor filed reply raising the following contentions: a. The payment made by the Petitioner is towards advance for the work that was to be carried out by the Corporate Debtor for supply of goods/material. b. The Petition filed under Section 7 of the Code is not maintainable. c. The Petitioner and the Corporate Debtor have business dealings since 2016. The Corporate Debtor has been delivering goods to the Petitioner as per their requirements. d. The Petitioner in June 2017 approached the Corporate Debtor requesting supply of processed Bentonite Powder for ₹ 2,88,400/-. The Petitioner has paid ₹ 22,90,400/- in three stages as advance for the future transactions. e. The Petitioner conveyed to the Corporate Debtor that if the goods are of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it is not necessary that the financial debt should always carry interest, but the decision is distinguishable from the facts of case on hand. In Shailesh Sangani s case, the financial creditor is also a shareholder of the Corporate Debtor who advanced money to the Corporate Debtor, without any interest, which has been shown in the balance sheet as unsecured loan. When the Petition u/s 7 was admitted recognizing the debt as a financial debt and when the promoter/shareholder/director of the Corporate Debtor preferred an appeal before NCLAT, the appeal was dismissed holding that it is a financial debt even though the financial creditor is not entitled for interest, observing that the promoter/shareholder/director may infuse funds into the Corporate Debtor without interest. In a nutshell it was effectively held that interest is not a sine qua non for classifying a debt as a financial debt. b. The Petitioner further relied on the decision of NCLT, Mumbai Bench in the case of Anchor Leasing Pvt. Ltd. vs Euro Ceramics Ltd. wherein it was held that even though there was no express agreement for the loan arrangement or the payment of interest, the acknowledgment of debt by the Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; Explanation.-- For the purposes of this sub-clause,-- (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, allottee and real estate project shall have the meanings respectively assigned to them in Clauses (d) and (zn) of Section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);22 (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 ..... 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