Earnest money payment is not a financial debt

S. Chandriah Vs Sunil Kumar Agarwal (NCLAT) Held that a ‘Financial Debt’ is a debt alongwith interest which is disbursed against the consideration for the time value of money. Earnest money doesn’t satisfy the essential condition of financial debt and accordingly categorized as other creditor. Facts- The Appellant sent a letter dated 14.09.2018 to the Corporate Debtor (M/s. Digjam Limited) setting out his offer to purchase surplus land available at the Mills premises of the Corporate Debtor at Jamnagar (Gujarat). Thereafter, the Appellant made payment of Earnest Money by RTGS/NEFT to the...