The IBC Code nowhere prescribes about compulsory existence of an Express Agreement to prove the loan and its disbursement, but defined in Section 5(8) are the conditions under which a transaction be treated as a ‘Financial Debt’.
On perusal of the arguments of both the sides and the documents and evidences placed on record, this Bench finds that although there is no express agreement to the loan arrangement as aforesaid or the payment of interest thereon, but there are acknowledgements of the Corporate Debtor, not once but many a times, which reveal that the Financial creditor and the Corporate Debtor shared a creditor-debtor relationship. Further, the statement of accounts produced on record prove the disbursement of the loan amount of Rs. 5,00,00,000/- and the Corporate Debtor has even paid interest for the same till 02.07.2011. This argument of the Financial Creditor was convincing enough that the loan has been granted for a consideration for the time value of money. The Code nowhere prescribes the compulsory existence of an express agreement to prove the loan and its disbursement, but defined in section 5(8) the conditions under which a transaction be treated as a ‘Financial Debt’. Therefore, this contention of the Corporate Debtor is hereby rejected.