https://www.taxtmi.com/caselaws?id=463047 The NCLAT upheld the Resolution Professional's rejection of the claim, ruling that the fully convertible debentures (CCDs) constitute equity instruments, not financial debt under Section 5(8) of the IBC. The agreements between parties consistently treated the CCDs as equity, with no provisions altering their nature upon any event. Interest payable by the sponsor on default does not convert CCDs into financial debt. The Corporate Debtor was prohibited from incurring further debt without lender consent, which was not obtained. The claim was also dismissed due to delay in challenging the rejection, filed four months late after the claim was denied. With the Resolution Plan approved by the CoC, the appeal was dismissed, affirming the CCDs' classification as equity, not financial debt. en-us Mon, 05 Jun 2023 00:00:00 +0530 Sat, 02 Aug 2025 16:00:18 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=463047 The NCLAT upheld the Resolution Professional's rejection of the claim, ruling that the fully convertible debentures (CCDs) constitute equity instruments, not financial debt under Section 5(8) of the IBC. The agreements between parties consistently treated the CCDs as equity, with no provisions altering their nature upon any event. Interest payable by the sponsor on default does not convert CCDs into financial debt. The Corporate Debtor was prohibited from incurring further debt without lender consent, which was not obtained. The claim was also dismissed due to delay in challenging the rejection, filed four months late after the claim was denied. With the Resolution Plan approved by the CoC, the appeal was dismissed, affirming the CCDs' classification as equity, not financial debt. Case-Laws IBC Mon, 05 Jun 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=463047