Absence Of Formal Written Agreement Does Not Preclude Establishment Of Financial Debt: NCLT Delhi

The NCLT Delhi has ruled that the absence of a formal written agreement does not necessarily preclude the establishment of a "financial debt" under the Insolvency and Bankruptcy Code (IBC). The tribunal held that financial debt can be proven through other documentary evidence, such as tax filings (Form 26AS), TDS deductions, ledger entries, financial statements, and written acknowledgments of liability. This decision provides flexibility in establishing financial debt, especially in cases where informal arrangements exist but clear evidence of financial transactions and a time value of money can be demonstrated. It broadens the scope of evidence acceptable for initiating CIRP.