20/02/2024

Commission on sale amount neither falls in the menu of transactions delineated at sub-clauses (a) to (i) of Section 5(8) of IBC nor does it fall in the category of being a disbursal having time value of money – Mr. Surendra Kanhaiyalal Shah Vs. Magicon Impex Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) It is a well settled proposition of law that any debt to be treated as “financial debt”, there must take place disbursal of money and the disbursal must be against consideration for time value of money and also includes anything which is equivalent to the money that has been loaned as long as commercial effect of borrowing or profit is discernible.
(ii) Tested against this statutory construct of IBC with regard to “financial debt” and the settled position of law as mentioned in the preceding paragraphs, we do not find any good reason to disagree with the findings referred in the impugned order that “commission on sale” amount neither falls in the menu of transactions delineated at sub clauses (a) to (i) of Section 5(8) of the IBC nor does it fall in the category of being a disbursal having time value of money. To our minds, “commission on sale” does not carry the implications of commercial effect of borrowing either.

Commission on sale amount neither falls in the menu of transactions delineated at sub-clauses (a) to (i) of Section 5(8) of IBC nor does it fall in the category of being a disbursal having time value of money – Mr. Surendra Kanhaiyalal Shah Vs. Magicon Impex Pvt. Ltd. – NCLAT New Delhi Read Post »

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