https://www.taxtmi.com/caselaws?id=785335 Financial debt characterization and genuineness of loan transactions in insolvency were examined: where an advance was treated as liability in the balance sheet and not as borrowing, it did not qualify as financial debt, and thus was not entitled to recovery as such. The use of funds contrary to loan purposespecifically diversion to purchase a personal Audi A6was held to demonstrate a sham transaction and misappropriation, justifying rejection of the proof of claim. Verification of claims via account records and loan agreement terms supported the view that the claim was not bona fide, leading to dismissal of the appeal. en-us Tue, 20 Jan 2026 00:00:00 +0530 Thu, 22 Jan 2026 08:41:30 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=785335 Financial debt characterization and genuineness of loan transactions in insolvency were examined: where an advance was treated as liability in the balance sheet and not as borrowing, it did not qualify as financial debt, and thus was not entitled to recovery as such. The use of funds contrary to loan purposespecifically diversion to purchase a personal Audi A6was held to demonstrate a sham transaction and misappropriation, justifying rejection of the proof of claim. Verification of claims via account records and loan agreement terms supported the view that the claim was not bona fide, leading to dismissal of the appeal. Case-Laws IBC Tue, 20 Jan 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=785335