https://www.taxtmi.com/highlights?id=93654 SC dismissed the appeal and rejected the Section 7 invocation, holding the appellant was not a financial creditor. The Court found the cumulative redeemable preference shares constituted share capital, not a loan, and dividends depend on profits; amounts paid on CRPS do not qualify as debt. Redemption had not become due because there were no profits, reserves or fresh-issue proceeds for redemption, so no default under Section 3(12) arose. The prior liability stood extinguished on issuance of CRPS, converting the relationship into that of a preference shareholder, and there was no commercial effect of borrowing. Consequently, the Section 7 application was unsustainable and the appeal was dismissed. en-us Wed, 29 Oct 2025 08:22:31 +0530 Wed, 29 Oct 2025 08:22:31 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=93654 SC dismissed the appeal and rejected the Section 7 invocation, holding the appellant was not a financial creditor. The Court found the cumulative redeemable preference shares constituted share capital, not a loan, and dividends depend on profits; amounts paid on CRPS do not qualify as debt. Redemption had not become due because there were no profits, reserves or fresh-issue proceeds for redemption, so no default under Section 3(12) arose. The prior liability stood extinguished on issuance of CRPS, converting the relationship into that of a preference shareholder, and there was no commercial effect of borrowing. Consequently, the Section 7 application was unsustainable and the appeal was dismissed. Highlights IBC Wed, 29 Oct 2025 08:22:31 +0530 https://www.taxtmi.com/highlights?id=93654