In Brief
A company (M/s Orator Marketing) assigned a loan from its sister company to claim creditor status to initiate insolvency proceedings against a debtor. The loan of Rs. 1.60 crores was interest-free and advanced to meet working capital needs. The lower courts rejected the claim, ruling that without interest, it was not 'financial debt' under the Insolvency and Bankruptcy Code. The Supreme Court reversed this, holding that interest-free loans for business operations can constitute financial debt. The definition of financial debt, read in context with the Code's legislative intent, does not expressly exclude such loans. The presence of the phrase 'if any' regarding interest contemplates interest-free scenarios. The appeal was allowed and the petition revived for fresh adjudication.
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