NCLAT Interprets the Definition of “Financial Debt” under Insolvency Law

[Medhashree Verma and Kavya Lalchandani are 3rd year B.B.A, LL.B. students at National Law University Odisha, Cuttack] In a recent judgment in Jignesh Shah v. IL&FS Financial Services Limited & Anr., the National Company Law Appellate Tribunal (NCLAT) dealt with the interpretation of the term ‘financial debt’ under the Insolvency and Bankruptcy Code, 2016. It is only when the debt extended by the creditors falls under the definition of ‘financial debt’ that they are considered as ‘financial creditors’ and become eligible to move an application under section 7 of the Code. Therefore, the interpretation of the term financial debt has considerable bearing on whether the corporate insolvency resolution process can be triggered in a given case.    Facts IL&FS Financial Services Limited filed a section 7 application before the National Company Law Tribunal (NCLT), Mumbai against La-Fin Financial Services Pvt. Ltd for a…

Read more detail on Recent Business Law posts –

This entry was posted in Business law and tagged , , , , , , . Bookmark the permalink.

Leave a Reply