JUDGMENT :

SUDHANSU JYOTI MUKHOPADHAYA, J.

In the Corporate Insolvency Resolution Process against ‘Ruchi Soya Industries Ltd.’ (Corporate Debtor), the Appellant -‘Cooperative Rabobank U. A. Singapore Branch’, one of the creditors, made claim before the Resolution Professional stating that the Corporate Debtor owed to pay USD 107,36,972.90, basing on the Bills of Exchanges, ordering this Corporate Debtor to pay to the Creditor for the goods supplied by another party in between, i.e. ‘Avanti Industries Pvt. Ltd.’. The Appellant claimed to be the ‘Financial Creditor’ which was rejected by the Resolution Professional. The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench by order dated 14th May, 2018 also held that the Appellant is not a ‘Financial Creditor’ but an ‘Operational Creditor’.

2. The question arises for consideration in this appeal is whether on the basis of Deed of Exchange, the Appellant can claim to be a ‘Financial Creditor’?

3. The case of the Appellant is that it is an international bank, which is in the business of providing banking and financial services including financing export/ import transactions by discounting bills of exchange (BoEs). The sole consideration for the Appellant in discounting BoEs is the discount interest and commission earned by the Appellant based upon the maturity period of the BoEs i.e. based on the time value of money. Such discounting facilities are akin to lending of money for earning interest and are, therefore, purely financial in nature. The Appellant is neither made a party to the export/ import contracts nor is it responsible for any obligations whatsoever under the export/ import contracts.

4. BoEs discounting is one of the modes of raising finance in trade transactions. Banks and financial institutions extend such discounting facilities on the premise that the repayment of debts owed under the BoEs would not be subject to the underlying export/ import transaction.

5. According to learned counsel for the Appellant, certain banks in India such as ‘Export Import Bank of India’ are primarily involved in the business of discounting BoEs for financing export/import transactions. To classify such BoEs discounting transactions as ‘operational debts’ would discourage banks and financial institutions from financing trade debts, unless they want to be automatically classified as ‘operational creditors’ much like suppliers of goods. This would defeat the very objective of the Insolvency and Bankruptcy Code, 2016 to promote the growth of credit market in India.

6. According to the Appellant, it entered into a Master Sales and Purchase Agreement dated 22nd October 2013 (MSPA), wherein it was agreed that upon acceptance by the Corporate Debtor of certain BoEs, the Appellant would discount the BoEs and disburse the discounted proceeds to a third party supplier of the Corporate Debtor, Aavanti Industries Pvt. Ltd. (Aavanti). (Clause 1,2 of the MSPA).

7. It was further agreed under the MSPA that the Appellant will not have any recourse to Aavanti and would be able to claim the amounts due under the BoEs only from the Corporate Debtor. (Clause 4 (C) of the MSPA).

8. In accordance with the MSPA, the Corporate Debtor accepted the BoEs by signing on the BoEs and thereby, unconditionally agreed to pay the amounts due under the BoEs to the Appellant. (Sample BoE)

9. It is only upon the acceptance of the BoEs by the Corporate Debtor, that the Appellant disbursed the discounted proceeds to Aavanti. Accordingly, an aggregate amount of USD 107,376,972.90 (excluding interest and other charges) was payable by the Corporate Debtor to the Appellant under the BoEs. Subsequently, on the maturity of the said BoEs, the BoEs were presented for payment to the Corporate Debtor and were dishonoured due to non-payment

10. Learned counsel for the Appellant submitted that the Resolution Professional has accepted and admitted Appellant’s claim of USD 107,36,972.90 alongwith interest and other charges. However, at