https://www.taxtmi.com/highlights?id=99596 Section 7 of the Insolvency and Bankruptcy Code requires the existence of a financial debt and default, but the Supreme Court held that insolvency cannot be used as a coercive recovery tool. Reading the quadripartite agreement, the Court found that the disbursement was made to the builder and was tied to construction, transfer, refund contingencies, non-transfer without consent, and security creation, making the dispute predominantly contractual rather than a simple lending default. As recovery proceedings were already pending before the DRT, initiation of CIRP was unwarranted and the refusal to admit the Section 7 application was upheld. en-us Sat, 09 May 2026 07:26:06 +0530 Sat, 09 May 2026 07:26:06 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=99596 Section 7 of the Insolvency and Bankruptcy Code requires the existence of a financial debt and default, but the Supreme Court held that insolvency cannot be used as a coercive recovery tool. Reading the quadripartite agreement, the Court found that the disbursement was made to the builder and was tied to construction, transfer, refund contingencies, non-transfer without consent, and security creation, making the dispute predominantly contractual rather than a simple lending default. As recovery proceedings were already pending before the DRT, initiation of CIRP was unwarranted and the refusal to admit the Section 7 application was upheld. Highlights IBC Sat, 09 May 2026 07:26:06 +0530 https://www.taxtmi.com/highlights?id=99596