Page 455 - IBC Orders us 7-CA Mukesh Mohan

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

buyer by giving him 3-5 monthly instalments support. He assured us that he is ready to pay you USD
50000.00 immediately which means you have to support him for mere 98160.00 USD to be paid in
monthly instalments.

Similarly you can claim 80% payment for the 4th container of Yiannakis which he will pay you within 10

days from handing over the container"

So, the respondent cannot take any advantage of the release of the goods as it was done on the insistence
of the "Corporate Debtor". In the fact situation, it is quite clear that the goods and the documents in

exercise of its right of Lien, the petitioner would be both an "Operational Creditor", but qua the
purchaser/buyer on the basis of assignment, but it is definitely a "Financial Creditor" under the Trade
Facility Agreement qua the respondent - 'Corporate Debtor'.

28. This can be further explained by an illustration that in case the payment of goods is not made by the
buyer to the petitioner, the petitioner detains the goods and the documents in exercise of its right of lien,
the status of petitioner would always remain that of the "Financial Creditor" qua the Respondent-

'Corporate Debtor' and that status would not change simply, if the goods are released on the insistence of
the "Corporate Debtor".

29. Coming to the grievance that there was a loss to the "Corporate Debtor" because its purchase orders

for African countries were not being accepted despite the trade facility agreement, the answer can be
found from the terms of the agreement itself. Clause 4.2 of the agreement says that upon delivery by the
Seller of a Disbursement Request, the petitioner may in its entire discretion decide whether or not to grant

a Loan to the Seller, Should the petitioner agree to grant the proposed Loan, the term of such Loan shall
be governed by this Agreement and the relevant Disbursement Request, unless the petitioner accepts other
terms in writing. So, the petitioner was not bound to accept every disbursement request of the respondent.

30. The other contention of the "Corporate Debtor is based on the objection that as per clause 22 of the
agreement, the contract is to be governed by English law and the dispute have to be settled by arbitration
in London and, therefore, the instant petition is not maintainable before this Tribunal.

31. There is no substance in the above contention. I am of the considered view that once the petitioner is
proved to be a "Financial Creditor" and there being abundant evidence to determine the existence of
default committed by the "Corporate Debtor", the application under Section 7 of the Code is
maintainable. Sub-section (4) of Section 7 of the Code reads as under:-

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