Page 453 - IBC Orders us 7-CA Mukesh Mohan

Order Passed Under Sec 7
By Hon’ble NCLT Chandigarh Bench

23. So, the first question would be whether the petitioner falls within the definition of the term "Financial
Creditor". The term "Financial Creditor" is defined in sub-section (7) of Section 5 of the Code, as
meaning any person to whom a financial debt is owed and includes a person to whom such debt has been

legally assigned or transferred. Sub-Section (8) of Section 5 defines the term 'financial debt' and the
relevant clauses are reproduced below;-

"'financial debt' means a debt along with interest, if any, which is disbursed against the consideration for

the time value of money and includes-

(a) money borrowed against the payment of interest;

(b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent;

(c) ......................;

(d) ......................;

(e) receivables sold or discounted other than any receivables sold on non-recourse basis;

(f) any amount raised under any other transaction, including any forward sale or purchase agreement,

having the commercial effect of a borrowing;

(g) ..................;

(h) ..................;

(i) ...................;

24. This definition is of very wide connotation and undoubtedly covers the instant transaction where 80%

amount of each invoice has been paid to the respondent by way of loan on interest. Under the head
'Interest and Fees' as per clause 6.2 of the agreement, each loan shall be subject to-

(a) An annual fixed interest of 3.8% + USD LIBOR-6 months, The interest will be calculated daily from
the Disbursement Date and until the Repayment Date; and

(b) Processing fee of USD 100 per drawdown.

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