06/09/2021

NCLAT held that the essence of any debt to be described as financial debt is the time value of money as Borrowing is a name for money transaction. The word debt is applicable to a sum of money which has been promised at a future day as against a sum nor due and payable. In fact, a sum of money which is certainly and in all events payable is a ‘debt’, in regard to the fact whether it is payable now or at a future date. Under the Code, 2016 the shift is from ‘inability to pay’ to an ‘existence of default’. No doubt, the ‘Adjudicating Authority’ is not required to decide the amount of ‘default’. Even if a ‘debt’ is disputed, if the same is more than Rs.1,00,000/- then the application filed under Section 7 of the Code is maintainable in Law. A ‘debt’ disbursed against the consideration for ‘Advance Payment’ in terms of the ‘Agreement’ and further that in the present Appeal before this Tribunal, it is brought forth that the Appellant had promised to repay/refund the amount paid by the Respondent/Applicant together with interest, and therefore, this Tribunal comes to an inevitable and inescapable cocksure conclusion that the aforesaid promise comes squarely within the ambit of definition of Financial Debt and that the Respondent/Applicant is without any haziness is a Financial Creditor in the eye of Law.(p63-64 & 71)