Security Deposit Under MoU Without Borrowing Effect Not Financial Debt: NCLAT

Global Indian School Education Services Pvt. Ltd. Vs Abhay Narayan Manudhane (NCLAT Delhi) National Company Law Appellate Tribunal (NCLAT) Delhi ruled in Global Indian School Education Services Pvt. Ltd. Vs Abhay Narayan Manudhane that a security deposit provided under a Memorandum of Understanding (MoU) without a commercial borrowing element does not constitute financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC). The case revolved around whether the claim of the appellant should be classified as financial debt or another form of liability. The appellant argued that the securit...