CA(AT)(I)-717/2020-NCLAT

The first Respondent shall make the payment of the consideration directly to the Lenders towards the amount payable under the OTS by the Corporate Debtor. The consideration for the purchase of the Scheduled Property structure together with the plant and machinery standing thereon shall move to the Lender from the first Respondent, at the instance of the Corporate Debtor. Hence, it is seen from the agreement clauses that the Agreement to Sell emanates from the One Time Settlement entered into between the Corporate Debtor and the Lender Bank and it is only in lieu of the consideration paid by the first Respondent to the Lender Bank on behalf of the Corporate Debtor, that the Agreement of Sale for the subject property was executed. Therefore, the contention of the Learned Counsel appearing for the Appellant that the money was not utilized by the Corporate Debtor, but paid to the Lender and as the utilization of money by the Corporate Debtor is a sine qua non and therefore, the debt does not fall within the definition of Transaction as defined under Section 3(33) or under Financial Debt as defined under Section 5(8)(i), is untenable. A combined reading of Sections 5(8), 3(33), 3(11) and 3(6) together with the admitted fact that the amount was paid by the first Respondent on behalf of the Corporate Debtor to the Lender Bank pursuant to the time bound OTS Settlement and further Clause 12 of the Agreement to Sell stipulates that the Corporate Debtor shall refund the amount with 24% interest per annum in case of failure on their behalf to execute and register the sale deed, establishes that the debt.