Phoenix Arc Private Limited v. Spade Financial Services Limited & Ors
A three Judge Bench of the Supreme Court comprising of Justices Dr. D. Y. Chandrachud, Indu Malhotra and Indira Banerjee while hearing an appeal challenging the orders passed by the NCLAT and the NCLT wherein two entities namely AAA Landmark Private Limited and Spade Financial Services Limited were excluded from the Committee of Creditors constituted for corporate insolvency resolution process initiated against Corporate Debtor, AKME Projects Limited; held that since the commercial arrangements between the creditor and corporate debtor is collusive in nature, the debt does not constitute as ‘financial debt’ and hence both the entities (Spade and AAA) are not financial creditors of the corporate debtor.