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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 ..... nepro Minerals Private Limited (hereinafter called "Corporate Debtor") for initiation of Corporate Insolvency Resolution Process ("CIRP") under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called "Code") read with Rule 4 of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 ("Rules") alleging that the Corporate Debtor committed default in making payment of financial debt of Rs. 17,11,600/-. 2. The Petition reveals that as on 01.04.2017 a sum of Rs. 40,400/- is outstanding as due from the Corporate Debtor. This is as per the ledger account of the Corporate Debtor in the books of the Petitioner which is enclosed to the Petition at Page No. 14. 3. The Petitioner submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L-04/16-17 155 297 650000 0 690400 03/201 7 001876 RTG S 0 650000 40400 Closing Balance 4319200 4278800 40400 /2017 002741 Ag. Bill No.: MMPLH01/16- 17,MMPL-04/16-17 155 297 650000 0 690400 03/201 7 001876 RTG S 0 650000 40400 Closing Balance 4319200 4278800 40400 Account Ledger of MINEPRO MINERALS PVT. LTD for the Period 1/4/2017 to 31/3/2018 Date Document No. Particulars Opening Balance:- Chq. No. Debit Amount Credit Amount Balance 40400 25/4/17 000 162 01478 0 2000000 0 2040400 21/6/17 002 08A Bill No.: MMPLH - 03/17-18 0 288400 1752000 23/6/17 000 535 01728 5 25000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Since the advance given by the Petitioner is more than the amount of goods to be supplied, the Corporate Debtor paid back Rs. 2,90,400/- to the Petitioner. The Corporate Debtor submits that they are required to supply 370 mts of processed bentonite powder for Rs. 17,11,600/, for which the Petitioner has given this advance. Further on demand from the Petitioner, the Corporate Debtor as security, issued 3 blank cheques for Rs. 6,00,000/-, Rs. 6,00,000/- and Rs. 5,11,600/-. g. The Petitioner approached one Earth Origins in order to mediate certain issues between the Petitioner and the Corporate Debtor. h. An arrangement was made between the Petitioner and one M/s. Earth Origins, wherein the packaging materials shall be provided by the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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 D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of "financial creditor" and "financial debt" makes it clear that a financial debt is a debt together with interest, if any, which is disbursed against the consideration for time value of money. It may further be money that is borrowed or raised in any of the manners prescribed in Section 5(8) or otherwise, as Section 5(8) is an inclusive definition. On the other hand, an "operational debt" would include a claim in respect of the provision of goods or services, including employment, or a debt in respect of payment of dues arising under any law and payable to the Government or any local authority". 10. Section 5 (8) of the Code provides as below: "financial debt" means a debt alongwith interest, if any, which is disbursed against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 in respect of any of the guarantee or indemnity for any of the items referred to in Sub-clauses (a) to (h) of this clause." 11. The ledger account produced by the Petitioner clearly shows that the Petitioner used to purchase goods from the Corporate Debtor and payments were made by the Petitioner. It is not even the case of the Petitioner that the amount paid to the Corporate Debtor is separately accounted by him as a loan and the same is shown in his balance sheet as an unsecured loan. The payment of mone ..... X X X X Extracts X X X X X X X X Extracts X X X X
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