Kanthi Narahari JUDGMENT
Kanthi Narahari, Member (T)
1. M/s. Saregama India Limited - Appellant filed the present appeal aggrieved by the order of the Adjudicating Authority (National Company Law Tribunal, Division Bench, Chennai) dated 14th February, 2019 whereby the Adjudicating Authority dismissed the application of the Appellant.
2. The Appellant filed application before the Adjudicating Authority (National Company Law Tribunal, Division Bench, Chennai) under Section 7 of Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'IBC') against the Corporate Debtor - M/s. Home Movie Makers Private Limited (Respondent herein) for initiation of Corporate Insolvency Resolution Process.
3. The Adjudicating Authority, after hearing the parties, dismissed the Application holding that the claim made by the Appellant (Financial Creditor) is not a 'financial debt'. Paragraphs-9 & 10 of the impugned order is extracted hereunder:
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"9. In view of the reasons aforementioned, we believe that it is not a financial debt and the petitioner tried to masquerade it as financial debt when reply came to section 8 Notice from the corporate debtor. Therefore, this Bench having felt that this petitioner should not have concealed the facts and tried to metamorphose this petition as petition u/s. 7 of the Code, this Company Petition is hereby dismissed by imposing costs of ` 1,00,000 payable to the Corporate Debtor within 15 days hereof.
10. Accordingly this Company Petition is hereby dismissed"
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4. The Appellant in support of their grounds argued that the transaction between the parties clearly establishes it is a financial debt.
5. Per contra, the Respondent (Corporate Debtor) denied the stand of the Appellant and states that it is not a financial debt in terms of Section 5(8) of the IBC and there was no Time Value of Money as consideration therefore the application of the Appellant was rightly rejected by the Adjudicating Authority.
6. After hearing the learned Counsel for the respective parties, perused, the pleadings, documents filed in support of their case, the only point for consideration is whether the claim of the Appellant fall under the category of financial debt or not. Before adverting to the point narration of brief facts are essential to decide the point.
7. The Appellant Company is a marketing agency and in the business, inter alia, marketing television programmes and serials in the form of episodes for telecasting over various television channels and for distribution through various other media. The Respondent Company is a Producer inter alia producing a television programme/serial in Tamil titled as 'PASALMAR' and 'GANGA' being telecasted on SUN TV Channel as a daily serial.
8. The Appellant and the Respondent initially entered into an agreement dated 28.09.2013 (Page 56 of the Paper Book) whereby the Respondent (Producer) sold its rights exclusively to the Appellant i.e. (Marketing Agency), the entire "Free Commercial Time" (In short "FCT") available of the programme and in consideration of the same, the Appellant has to pay amount as agreed for availing the FCT to the Respondent in telecasting the serial produced by the Respondent. While doing so, the........