Practical Accounts And Taxation
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Petition filed under section 7 was to be dismissed, as applicant failed to furnish details of so-called expenses made to corporate debtor and also failed to establish that same were made for time value of money, applicant did not come within purview of financial creditor.
•The Applicant claimed to have extended financial assistance from time-to-time to the respondent company as applicant-company i.e., financial creditor entered into an arrangement of job work with the respondent-corporate debtor.
•A sum was outstanding from the corporate debtor towards principal amount along with interest as per the financial creditor claim.
•The applicant filed instant petition under section 7 to initiate corporate failure resolution process against the corporate debtor.
•The corporate debtor in its reply stated that instant application had been filed merely on the basis of the statement of accounts having entries related to the sale and purchase of goods.
As per NCLT:
•If any some is paid against consideration for time value of money, it is called as 'financial debt' which is along with interest. The applicant has to satisfy that applicant comes within definition of 'financial creditor' in order to maintain application filed under section 7 for initiation of corporate failure resolution process in respect of corporate debtor.
•No detailed particulars had been furnished as to when, how much amount and for what count loan was tendered.
•The application was to be rejected as he had miserably failed to furnish details of various disbursements alleged to have been made and also failed to establish that such disbursements were made for time value of money, so as to come within purview of 'financial creditor' in order to maintain application preferred under section 7.
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