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Supreme Court of India

Phoenix Arc Private Limited v. Spade Financial Services Limited & Ors.

Neutral citation
Bench Dr. Dhananjaya Y Chandrachud, Indu Malhotra and Indira Banerjee JJ.
Decided 1 February 2021

INSC stands for INDIAN SUPREME COURT. A neutral citation scheme assigned by the Court itself, so a judgment can be cited without depending on a commercial law reporter. INSC is the neutral citation scheme assigned by the Supreme Court, so a judgment can be cited without depending on a commercial law reporter.

6 Supreme Court benches have cited this judgment.

What the Court ordered

We hold that: (i) The decision of the NCLAT, in as much as it referred to Spade and AAA as financial creditors, is set aside.

Judgment, page 63

From the headnote

Insolvency and Bankruptcy Code, 2016 – ss.5(7), (8) – Financial creditor; financial debt – Sham/Collusive transactions, if financial debts – Held: person can be categorised as a financial creditor if a financial debt is owed to it – s.5(8) stipulates that the essential ingredient of a financial debt is disbursal against consideration for the time value of money – Money advanced as debt should be in the receipt of the borrower – Borrower is obligated to return the money or its equivalent along with the consideration for a time value of money, which is the compensation or price payable for the…

Authorities it was built on

Where later benches applied it

Of those, 1 relied on · 1 referred to · 4 mentioned

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