As per case facts, the Appellant, who was owed construction receivables, converted those dues into Cumulative Redeemable Preference Shares (CRPS) of the Respondent to improve the latter's debt-to-equity ratio for ... securing further bank loans. When the CRPS redemption period expired, the Appellant, being in liquidation, filed an IBC Section 7 application against the Respondent for non-payment of the redemption amount, treating it as a "financial debt." The NCLT and NCLAT dismissed the application, holding the CRPS was an investment, not a debt, and redemption conditions under the Companies Act (requiring profits or a fresh share issue) were unmet. The question arose whether the investment in Cumulative Redeemable Preference Shares (CRPS) constitutes a "financial debt" with the "commercial effect of borrowing" under Section 5(8)(f) of the IBC, entitling the holder to initiate a CIRP under Section 7. Finally, the Supreme Court dismissed the appeal, holding that CRPS are part of the company's share capital (equity) and, by nature, do not constitute a "debt" under IBC. As redemption was conditional on profits which the company lacked, the non-redemption did not lead to a default under Section 3(12) of the IBC, thus the Appellant was not a financial creditor.