Disbursal of an amount by itself cannot be construed as the existence of financial debt since there is no written terms and conditions between the parties – Narendra Promtoers & Fincon Pvt. Ltd. Vs. Vinline Engineering Pvt. Ltd. – NCLT Kolkata Bench
April 11, 2022
As per the RBI guidelines on Fair Practices Code for NBFCs, dated 18 February 2013, the NBFCs should convey in writing to the borrower in the vernacular language as understood by the borrower by means of sanction letter or otherwise, the amount of loan sanctioned along with the terms and conditions including annualized rate of interest and method of application thereof and keep the acceptance of these terms and conditions by the borrower on its record. The RBI’s circulars have statutory force, and this is well recognised in law. Hence, it is mandatory on the part of Financial Creditor, being a NBFCs to keep the terms and conditions recorded in writing. On perusal of the bank statement submitted by the Financial Creditor, it can be corroborated that a sum of Rs. 10 lakh was disbursed by the Financial Creditor to the Corporate Debtor on 08.09.2015. However, the disbursal by itself cannot be construed as the existence of financial debt since the written terms and conditions between the parties are not before us. There is nothing on record to show that such disbursement was a loan.