|National Company Law Appellate Tribunal
Section 5(8) IBC | Mortgage of Property Does Not Constitute 'Financial Debt' Without Disbursement Against Borrower : NCLAT
NCLAT clarifies that merely mortgaging property to secure a loan does not qualify as 'financial debt' under the IBC unless funds are disbursed to the corporate debtor. Creditors relying on mortgage security alone must now assert claims as 'other creditors,' impacting insolvency priority and recovery rights.