India Resurgence Arc Private Limited Vs M/s. Amit Metaliks Limited & Anr. (Supreme Court of India)
“Equality” means equality among equals or within the same class.
In the present facts of the case, the appellant company is said to be the assignee of the rights, title and interest carried by Religare Finvest Limited as secured financial creditor of the corporate debtor, having 3.94% of voting share in the Committee of Creditors.
The appellant herein expressed dissent on the share being proposed, particularly with reference to the value of the security interest held by it; and chose to remain a dissentient financial creditor as according to them they are getting lower share as per Resolution Plan whereas the security interest held by them is far more, but RP observed that Liquidation option may be beneficial to one creditor but is definitely detrimental to other secured lenders who are having majority stake of around 96%. Further the RP also said that the objective of IBC is resolution and revival of a distressed company and is not a recovery procedure.
The Adjudicating Authority found the plan to be feasible and viable with judicious distribution of financial bids by CoC to the stakeholders.
It was contended by the appellant that after the amendment to Section 30(4) of IBC, the CoC was to ensure that the manner of distribution takes into account the order of priority among the creditors as also the priority and value of the security interest of a secured creditor; and the resolution applicant and the CoC having failed to consider the existing security interest in its favour, approval of the Adjudicating Authority was not in accordance with law.
