Financial Lease With Ownership Transfer & Interest On Delayed Payments Qualifies As Financial Debt

The NCLT Delhi confirmed that the Ghaziabad Development Authority (GDA) qualifies as a financial creditor in the Corporate Insolvency Resolution Process (CIRP) of Celebration City Projects Pvt. Ltd.

It held that the 2007 agreement, which included ownership transfer provisions and interest on delayed payments, constituted "financial debt" under Section 5(8)(d) of the Insolvency and Bankruptcy Code (IBC).

The Interim Resolution Professional (IRP) had earlier classified GDA’s claim as operational debt, but the tribunal rejected this view, citing the agreement's "time value of money" element.

As a result, GDA was directed to join the committee of creditors.