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TMI Blog2023 (3) TMI 1213X X X X Extracts X X X X X X X X Extracts X X X X ..... invoice and deposited the amounts into an escrow/nodal account maintained by KredX with an escrow/nodal agent, namely, Yes Bank Limited who further transferred the said amount to the account of the Seller and on receiving, the Seller transferred its right to receive the money under the invoices in favour of the Financiers/Appellants. In this transaction, the money was never disbursed much less for the time value as a financial debt to the Corporate Debtor and by virtue of discounting the invoice of the Seller of an amount of Rs.3,42,03,903/- for amount of Rs.1,75,23,133/- the Financiers/Appellants entered into shoes of the Seller and had become Operational Creditors in terms of Section 5(20) as well as 21(5) and Section 5(7) and 5(8)(e) of the Code is not at all applicable. There is no error in the order of the Adjudicating Authority who has though rejected the application filed under Section 7 of the Code but relegated the Appellants (Financiers) to avail their remedy under Section 9 of the Code in accordance with law. Appeal dismissed. - Company Appeal (AT) (Ins) No. 572 of 2022 & I.A. No. 1530 of 2022 Company Appeal (AT) (Ins) No. 780 of 2022 - - - Dated:- 28-3-2023 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Corporate Debtor uploaded the invoices raised on it by the Seller and were listed on KredX s invoice discounting/reverse invoice discounting platform. Pursuant to which, the Appellants in the second appeal, Corporate Debtor, Seller and the Appellant in the first appeal executed a separate and independent Agreement for Creation of Rights (COR) for creating rights in the receivables under the invoices in favour of the Appellants in the second appeal. It is further alleged that after the execution of the COR Agreements, the Appellants in the second appeal discounted the invoices and deposited the amounts in an escrow account maintained by KredX with Yes Bank Ltd. and the said amount was transferred to the account of the Seller as a result of which, the liability of the Corporate Debtor towards Seller stood extinguished and the Corporate Debtor owed the same liability to the Appellants in the second appeal. It is thus alleged that the Appellants in the second appeal were to get resolution of the debt amount due from the Corporate Debtor but since the amount was not serviced despite communication by the Appellant in the first appeal who called upon the Corporate Debtor to ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged financiers who had discounted the invoice of the Seller have also filed their own appeal which is also being heard with first appeal, therefore, we would rather deal with the merits of the case to find out as to whether the application filed under Section 7 of the Code by the Appellants in the second appeal has rightly been rejected or not? 4. It may be pertinent to mention that the amount involved in the five different invoices raised by the Seller was of Rs.3,42,03,903/- for the goods purchased by the Corporate Debtor and the amount disbursed by the Financiers (Appellants in appeal no. 2) was of Rs. 1,75,23,133/- under separate individual transactions of reverse invoice-discounting from 16.05.2019 to 10.09.2019. 5. The moot issue in this case is thus as to whether the Appellants in the second appeal (Financiers) are the Financial Creditors as against the Corporate Debtor or have stepped in to shoes of the Seller as an Operational Creditors and as such application filed by the Appellants in the second appeal under Section 7 of the Code has rightly been held to be not maintainable and were rightly relegated to avail their remedy of filing the application under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny person to whom such debt has been legally assigned or transferred; 21(5). Where an operational creditor has assigned or legally transferred any operational debt to a financial creditor, the assignee or transferee shall be considered as an operational creditor to the extent of such assignment or legal transfer. 11. According to the Respondent the amount was never disbursed to the Corporate Debtor. In this regard, he has relied upon a decision of the Hon ble Supreme Court in the case of Jaypee Infratech Ltd. Interim Resolution Professional Vs. Axis Bank Ltd., (2020) 8 SCC 401, to contend that disbursal against the consideration for the time value of money is a pre-requisite for declaring transaction as a financial debt. He has also relied upon a decision of this Tribunal in the case of Cooperative Rabobank W.A. Singapore Branch Vs. Shalindra Ajmera, 2019 SCC Online NCLAT 812, in which similar controversy was decided and it has been held that it would be termed as an Operational debt. It is further argued that it has been averred by the Appellant that upon the execution of COR agreements, discounted the invoice and deposited the amount into escrow/nodal account maintain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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