A secured creditor is outside the winding up process of a company, unless he files a suit for the realisation of his security

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Last updated: 10 March 2021
Quick Summary
This Supreme Court judgement clarifies the position of secured creditors in company winding-up proceedings. Generally, a secured creditor is considered outside the winding-up process. However, this exclusion does not apply if the creditor initiates legal action to realise their security. The case involves an operational creditor with a decree against a company that is undergoing winding up.

Court :
Supreme Court of India

Brief :
This appeal arises out of the judgment dated 07.02.2020, as corrected by order dated 21.09.2020, by the National Company Law Appellate Tribunal [“NCLAT”]. The Appellant is an operational creditor of Respondent No.2 herein – M/s. Shree Ram Urban Infrastructure Limited [“SRUIL”], the company under winding up

Citation :
CIVIL APPEAL NOs.4230-4234 OF 2020

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