NDLI: Dbs Bank Limited Singapore Vs. Ruchi Soya Industries Limited and Another

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Dissenting financial creditor Minimum value of security interest
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Insolvency and Bankruptcy Code, 2016 (31 of 2016)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Others
Headnote	Insolvency and Bankruptcy Code, 2016 – s.30(2)(b)(ii) – Interpretation:Held: s.30(2)(b)(ii) forfends the dissenting financial creditor from settling for a lower amount payable under the resolution plan – A financial creditor can dissent if the resolution plan is discriminatory or against a provision of law– However, a dissenting financial creditor cannot take advantage of s.30(2)(b)(ii) – A secured creditor cannot claim preference over another secured creditor at the stage of distribution on the ground of a dissent or assent, otherwise the distribution would be arbitrary and discriminative – Purpose of the amendment was only to ensure that a dissenting financial creditor does not get anything less than the liquidation value, but not for getting the maximum of the secured assets – There is a contradiction in the reasoning given in the judgment of this Court in India Resurgence ARC Private Limited v. Amit Metaliks Limited & Another [2021] 6 SCR 611, which is in discord with the ratio decidendi of the decisions of the three Judge Bench in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta & Ors [2019] 16 SCR 275 and Jaypee Kensington Boulevard Apartments Welfare Association & Others. v. NBCC (India) Limited & Others [2021] 12 SCR 603 – Provisions of s.30(2)(b)(ii) by law provides assurance to the dissenting creditors that they will receive as money the amount they would have received in the liquidation proceedings – This rule also applies to the operational creditors – This ensures that dissenting creditors receive the payment of the value of their security interest – Paragraph 17 in India Resurgence is correct in its observations when it refers to the provisions of s.30(4) and that the voting is essentially a matter which relates to commercial wisdom of the CoC – The observation that a dissenting secured creditor cannot suggest that a higher amount be paid to it is also correct – However, this does not affect the right of a dissenting secured creditor to get payment equal to the value of the security interest in terms ofs.30(2)(b)(ii) – Further, Paragraph 21 is partially correct – It is incorrect to state that the dissenting financial creditor would not be entitled to receive the liquidation value, the amount payable to him in terms of s.53(1) – Reasoning given in the earlier portion of paragraph 22 in conflict with the ratio in Committee of Creditors of Essar Steel India Limited as it does not take into account the legal effect of s.30(2)(b)(ii) – Present view taken different from India Resurgence ARC Private Limited on interpretation of s.30(2)(b)(ii) – Matter referred to larger Bench. [Paras 26, 27,31, 33, 36 and 49] Insolvency and Bankruptcy Code, 2016 – s.30(2), Explanation 2– IBC (Amendment) Act, 2019 – Appellant had preferred the first appeal before the NCLAT on 31.07.2019 – The Amendment Act was notified and came into effect on 16.08.2019 – Applicability of the Amendment Act:Held: Explanation 2(ii) clearly states that an appeal preferred u/s.61 or 62, when it is not barred by time under any provision of law, shall be heard and decided after considering the amended s.30(2)(b) under the Amendment Act – Clauses (i), (ii) and (iii) of Explanation 2 reflect the wide expanse and width of the legislative intent viz. the application of the Amendment Act, whether proceedings are pending before the adjudicating authority, the appellate authority, or before any court in a proceeding against an order of the adjudicating authority in respect of a resolution plan – Only when the resolution plan, as approved, has attained finality as no proceedings are pending, that the amendments will not apply to re-write the settled matter. [Para 22]
Judge	Hon'ble Mr. Justice Sanjiv Khanna
Neutral Citation	2024 INSC 14
Petitioner	DBS Bank Limited Singapore
Respondent	Ruchi Soya Industries Limited And Another
SCR	[2024] 1 S.C.R. 114
Judgement Date	2024-01-03
Case Number	9133

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