https://www.taxtmi.com/caselaws?id=409739 At the Section 7 admission stage under the Insolvency and Bankruptcy Code, the adjudicating authority may examine the real substance of the transaction to ensure insolvency is not used for an improper purpose, and that scrutiny was within jurisdiction. The alleged advance lacked the essential features of financial debt because there was no loan agreement, repayment terms, or clear material showing disbursal against the time value of money; the running ledger also indicated reciprocal entries rather than borrowing, so financial debt and default were not established. The filing was further treated as collusive, as the circumstances suggested use of insolvency proceedings to obtain moratorium benefits and hinder another creditor. en-us Tue, 13 Jul 2021 00:00:00 +0530 Thu, 15 Jul 2021 08:04:48 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=409739 At the Section 7 admission stage under the Insolvency and Bankruptcy Code, the adjudicating authority may examine the real substance of the transaction to ensure insolvency is not used for an improper purpose, and that scrutiny was within jurisdiction. The alleged advance lacked the essential features of financial debt because there was no loan agreement, repayment terms, or clear material showing disbursal against the time value of money; the running ledger also indicated reciprocal entries rather than borrowing, so financial debt and default were not established. The filing was further treated as collusive, as the circumstances suggested use of insolvency proceedings to obtain moratorium benefits and hinder another creditor. Case-Laws Insolvency and Bankruptcy Tue, 13 Jul 2021 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=409739