Interest is not a sine qua non for a debt to be considered as a ‘financial debt’ under the Insolvency and Bankruptcy Code, 2016.
On July 26, 2021, a two-judge bench of the Supreme Court of India held, in the case of Orator Marketing Private Limited vs. Samtex Desinz Private Limited, the definition of ‘financial debt’ in Section 5(8) of Insolvency and Bankruptcy Code, 2016 (“IBC”) does not expressly exclude an interest free loan and would have to be construed to include interest free loans advanced to finance the business operations of a corporate body.
Civil Appeal No. 2231 of 2021
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