Dissenting Financial Creditor Vs. The Committee Of Creditors: Who Prevails?

In a recent decision in India Resurgence ARC Pvt. Ltd. v. M/s Amit Metalinks Ltd. & Anr.¹, the Hon'ble Supreme Court held that a security interest available to a dissenting financial creditor over the assets of the corporate debtor does not give it a right over and above other financial creditors. Thus, the dissenting financial creditor cannot enforce the entire security interest and bring about an inequitable scenario by receiving amounts beyond the receivable liquidation value proposed for the same class of creditors. The present article briefly summarises the findings of the Hon'ble Supreme Court in the decision mentioned above.

Brief Facts

The appellant, in the instant matter, challenged the order of the National Company Law Appellate Tribunal (NCLAT) whereby the NCLAT refused to interfere with the order (Impugned Order) of the National Company Law Tribunal, Kochi Bench (NCLT). The NCLT had vide the Impugned Order approved the resolution plan submitted by