Determining status of third party holder as financial creditor The National company law tribunal in the case of Phoenix ARC Private Limited v Ketulbhai Ramubhai Patel, the Resolution Professional of Doshion Water Solutions Private Limited, held that Pledge under the definition of financial debt as mentioned in the Insolvency Bankruptcy Code, 2016 cannot be termed as “disbursement of any amount against the consideration for the time value of money”. In Furtherance of this court held that Phoenix Arc Limited cannot be considered as financial debtors of Doshion Limited in the following case The tribunal refused the contentions of the party based on the following grounds: No contract was initiated with the corporate debtor as required as per Section 126 of the Indian Contract Act. As observed in Jaypee Infratech Limited v Axis Bank Limited, an individual has only security interest over the assets of the borrower and so cannot be termed as a “financial Debtor” even if the person falls within the definition of a ‘secured creditor. The team at Reddy & amp; Reddy Law Firm comprises of legal professionals’ experts at handling varied Civil, Criminal and Commercial matters.