Mere finding on an Interlocutory Application that the debt claimed by the Creditor constituted a financial debt would not ipso facto justify admission or rejection of the application- Kerala Ayurveda Ltd. Vs. Tata Global Beverages Ltd. – NCLAT

NCLAT held that it emerges from the record that the application under Section 7 of the Code has not been dealt with at the stage of admission and no order has been passed either admitting or rejecting the application. Mere finding on an Interlocutory Application that the debt claimed by the Creditor constituted a ‘financial debt’ would not ipso facto justify admission or rejection of the application as learned Adjudicating Authority is required to consider the debt along with default and unless there is a finding in respect of default and an order of admission is passed, ‘Corporate Insolvency Resolution Process’ does not commence. Viewed in this perspective, it is futile to contend that the appeal in terms of Section 60(1) shall be maintainable.

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If any Public depositor applies showing due of the debt claiming itself as operational creditor and the Resolution Professional or the Tribunal do not accept the claim on the ground that they are not financial creditor, we allow the appellant to raise the question before the Tribunal and if any adverse decision is given by the Tribunal, it will be open to the appellant to raise the issue before NCLAT- Hind Motors India Ltd. Vs. Adjudicating Authority NCLT, Chandigarh – NCLAT New Delhi

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