https://www.taxtmi.com/caselaws?id=766088 A refundable security deposit paid to secure monthly rentals under an operational lease was not financial debt under the Insolvency and Bankruptcy Code because it was not disbursed against consideration for the time value of money and lacked the commercial effect of borrowing. The Tribunal held that the transaction's real nature, not the labels in the memorandum, was determinative, and that an interest clause triggered only on breach or termination was penal or in the nature of liquidated damages, not evidence of borrowing. The claimant therefore could not be treated as a financial creditor. en-us Thu, 13 Feb 2025 00:00:00 +0530 Tue, 18 Feb 2025 08:10:05 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=766088 A refundable security deposit paid to secure monthly rentals under an operational lease was not financial debt under the Insolvency and Bankruptcy Code because it was not disbursed against consideration for the time value of money and lacked the commercial effect of borrowing. The Tribunal held that the transaction's real nature, not the labels in the memorandum, was determinative, and that an interest clause triggered only on breach or termination was penal or in the nature of liquidated damages, not evidence of borrowing. The claimant therefore could not be treated as a financial creditor. Case-Laws IBC Thu, 13 Feb 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=766088