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TMI Blog2021 (1) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... 517/15-16, dated 23-3-2016 for 5x40 FCL (40 feet container loads) of 21/1 KW yarn @ Rs. 137/- per kg. ii. KTPL/518/15-16 dated 25-3-2016 for 5x40 FCL (40 feet container loads) of 21/1 KW yarn @Rs. 137/- per kg. b. That the Corporate Debtor has issued various proforma invoices in the name of Applicant and has also issued authorisation letters dated 1-4-2016 and 6-4-2016 directing the Applicant to pay the amounts mentioned in proforma invoice through RTGS mode to M/s ATA Agro Commodities Limited and debit the same to the Corporate Debtor. Accordingly, the applicant has paid the entire amount in advance as mentioned in proforma invoice. c. That the Applicant received only 4 FCL's instead of 10 FCL on different occasions and the Corporate Debtor failed to supply the remaining material. d. That on repeated demands, the Corporate Debtor has agreed to pay advance money vide letter dated 22-6-2016 along with Bankers Cheque for an amount of Rs. 1,62,19,375/-. Further an amount of Rs. 2Lakhs was paid by Corporate Debtor towards interest portion. e. That upon presentation of the said cheque in their Bank Account, the same was dishonoured with an endorsement "Funds Insufficient". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,68,99,220/- along with future interest @ 6% p.a. on a principal sum of Rs. 1,62,19,375/-from the date of filing of the suit till the date of realization be paid to the Applicant Company establishes the fact that the advance amount paid by the Applicant Company has the commercial effect of borrowing and the condition of the time value of money as mentioned U/s.5(8)(f) of the I&B Code, 2016 was satisfied by mentioning a future interest @ 6% p.a. on a principal sum of Rs. 1,62,19,375/- in the said Decree order. Further, since the applicant is also supported with an order in his favour in a money decree suit it is all the more imperative that the Applicant herein be recognized as Financial Creditor only. l. That in view of the above reasons the Applicant herein submitted his claim Application in Form C to the IRP. Subsequently the IRP admitted the claim amount along with the interest but declined the claim of the applicant as a Financial Creditor and directed to submit the claim in "Form F" under the category of other creditors, in view of the fact that there is no purchase agreement between the Applicant Company and the Corporate Debtor by which claim of the applicant be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant Company had paid the entire amounts as advance as mentioned in the Proforma Invoice to the bank account of the Corporate Debtor. Further, the Applicant in order to substantiate its contentions relied upon the Judgment of the Hon'ble NCLT, Kolkata Bench in the matter of SHRM Biotechnologies (P.) Ltd. (supra). d. The Applicant has been acting as if merely because it has filed a section 7 Application, it is eligible/entitled to be considered as a Financial Creditor, which is not a correct contention. For an Applicant to qualify as a Financial Creditor, the Applicant has to qualify and fall U/s.5(8) of IBC 2016 which deals with the Definition of Financial Debt and the said Definition itself says that, "Financial Debt means a Debt along with interest, if any, which is disbursed against the consideration of the time value of money." A perusal of the said definition clearly establishes the fact that there shall be "a Debt" at the first instance, which would have been disbursed against a consideration for a particular time and which would have value of money. A Financial Creditor is an entity which forwards debt with or without interest and which is repayable over a period of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the Applicant that it has filed its claim before RP under Form-C basing on the Judgment of XIII Additional District and Sessions Judge cum Commercial Court, Ranga Reddy District, Hyderabad in favour of the Applicant Company wherein an amount of Rs. 1,68,99,220/-along with future interest @ 6% p.a. However, the same was rejected by RP on the ground that the same does not fall under the definition of Financial Debt instead the same claim falls under the purview of operational debt. 6. It is on record that the quantum of amount is not in dispute between the parties, only dispute is in relation to the nature of the Debt, whether it is a Financial Debt or Operational Debt. 7. For determination of the same, it is pertinent to look at the transaction and agreement between the parties out of which the said claim of the Applicant arose. 8. In the instant case, the amount in claim is arising out of the judgment of XIII Additional District and Sessions Judge cum Commercial Court, Ranga Reddy District, Hyderabad and the said judgment arose out of the issue regarding payment of entire amount as advance by the Applicant towards the purchase orders placed with the Corporate Debtor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f monies out of immovable property given as security or involves any other relief pertaining to immovable property; (b) one of the contracting parties is the State or any of its agencies or instrumentalities, or a private body carrying out public functions;" 11. A reference to the aforesaid definition shows that the transaction entered into between the Applicant and Respondent squarely falls within clause 2(c)(xviii) supra and therefore the Commercial Court had jurisdiction over disputes arising out of such commercial transactions. As a result, the above said Court could entertain the claim of the Applicant herein and duly adjudicated upon the same. In fact, if the said transaction was not a commercial transaction but was financial in nature, the Commercial Court could not have adjudicated upon the same. Therefore, it is obvious that the claim made by the Applicant herein pertains to a commercial transaction between the parties. 12. Further, the definition of Financial Debt u/s 5(8) of the Code states as under: "Section 5(8): "financial debt" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money........" It is an adm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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