Limitation on the extent of the amount receivable by a dissenting financial creditor is innate u/s 30(2)(b) of the Insolvency and Bankruptcy Code

Last updated: 08 June 2021

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The Supreme Court has ruled that the limitation on the amount receivable by a dissenting financial creditor is an inherent part of Section 30(2)(b) of the Insolvency and Bankruptcy Code (IBC). This means dissenting creditors cannot necessarily expect to receive the full value of their security interest if a resolution plan is approved. The court's decision prioritises the overall resolution and revival of the corporate debtor over individual creditor recovery.

Court :
Supreme Court of India

Brief :
By way of this appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 , the appellant India Resurgence ARC Private Limited seeks to question the order dated 02.03.2021 passed by the National Company Law Appellate Tribunal, New Delhi in CA(AT)(Insolvency) No. 1061 of 2020, whereby the Appellate Authority rejected its challenge to the order dated 20.10.2020 passed by the National Company Law Tribunal, Kolkata Bench, Kolkata in approval of resolution plan in the corporate insolvency resolution process concerning the corporate debtor VSP Udyog Private Limited (respondent No. 2 herein), as submitted by the resolution applicant Amit Metaliks Limited (respondent No. 1 herein).

Citation :
CIVIL APPEAL NO. 1700 OF 2021

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