https://www.taxtmi.com/caselaws?id=776465 Borrower investments in subsidiaries were not treated as diversion or siphoning because the funds were found to have come from internal accruals and cash surpluses, not from borrowed money; on that basis, the wilful defaulter framework could not be invoked. The Court also held that a wilful defaulter declaration could not rest solely on a forensic audit report where the banks had not independently verified the source of funds or objectively assessed the borrower's track record. Mechanical reliance on an incomplete audit and failure to apply the circular's requirements of conscious, reasoned evaluation rendered the notice and declaration unsustainable. en-us Fri, 08 Aug 2025 00:00:00 +0530 Tue, 12 Aug 2025 08:32:24 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=776465 Borrower investments in subsidiaries were not treated as diversion or siphoning because the funds were found to have come from internal accruals and cash surpluses, not from borrowed money; on that basis, the wilful defaulter framework could not be invoked. The Court also held that a wilful defaulter declaration could not rest solely on a forensic audit report where the banks had not independently verified the source of funds or objectively assessed the borrower's track record. Mechanical reliance on an incomplete audit and failure to apply the circular's requirements of conscious, reasoned evaluation rendered the notice and declaration unsustainable. Case-Laws Companies Law Fri, 08 Aug 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=776465