The question to be determined is whether in absence of record of default as recorded with the information utility or any other “record or evidence of default” specified by the Board, an application under Section 7 is maintainable or not? – Neelkanth Township and Construction Pvt. Ltd. Vs. Urban Infrastructure Trustees Limited – NCLAT New Delhi

NCLAT held that clause (c) of sub-section (8) of Section 5 deals with any amount raised. pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument. From the aforesaid provision, the debentures come within the meaning of Financial Debt as defined in Clause (c) of Sub-Section (8) of Section 5. The Respondent- Corporate Debtor has a liability and obligation in respect of amount which is due to the debenture holder from the Corporate Debtor, including Financial Debt i.e. the amount due on maturity of debentures. The amount of debt and interest, as shown by appellant was to be disbursed against consideration for time value of the money. Therefore, it cannot be stated that debentures on maturity do not come Within the purview of amount payable against the consideration for the time value of the money. In, the aforesaid background, the Learned Adjudicating Authority having admitted the application under Section 7, the application being complete, no interference is called for. (p28, 31, 34 & 35)

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