The Court's decision emphasized the importance of protecting the rights of dissenting debenture holders and the application of Article 142 of the Constitution of India to extend benefits to retail debenture holders.

JUDGMENT :

B.R. Gavai, J.

1. Leave granted.

2. These appeals challenge the order of the High Court of Judicature at Bombay, dated 16th December 2022, vide which the High Court dismissed the Interim Application (L) No. 33514 of 2022 in Commercial Suit (L) No. 162 of 2022 filed by Reliance Home Finance Limited (hereinafter referred to as ‘RHFL’), respondent No. 2 herein, under Section 151 of the Civil Procedure Code, 1908 (for short, “CPC”), seeking approval of the Resolution Plan (for short, “RP”) pertaining to its dissolution, in light of the judgment of this Court in the case of Securities and Exchange Board of India v. Rajkumar Nagpal and Others, 2022 SCC Online SC 1119. The appeal arising out of SLP(C) No. 1078 of 2023 is filed by RHFL and appeal arising out of SLP(C) No. 411 of 2023 is filed by Authum Investment and Infrastructure Limited (hereinafter referred to as “AIIL”), a non-banking financial corporation, which had originally proposed the RP for RHFL.

3. The facts herein are taken from the appeal arising out of SLP(C) No. 411 of 2023 filed by AIIL, which, in brief, are as follows:

3.1 RHFL executed a number of Debenture Trust Deeds, of which nine were executed with the IDBI Trusteeship Services Limited, respondent No. 3 herein, for issuance of debentures on a private placement basis, having face value of Rs. 5 lakhs. These debentures were issued on 30th August 2018. It is pertinent to note that RHFL had, previously, taken upon itself substantial debt through loans from several banks and financial institutions.

3.2 In May 2019, RHFL defaulted on its loan obligations to various lenders. The outstanding debt was quantified to around Rs. 11,540 crore. It is important to note that its sister concern, Reliance Commercial Finance Limited (hereinafter referred to as ‘RCFL’), had previously defaulted on its loan obligations in March 2019.

3.3 On 6th July 2019, a consortium of lenders led by the lead bank, i.e., Bank of Baroda, respondent No. 4 herein, entered into an Inter-Creditor Agreement (hereinafter referred to as ‘ICA’) in terms of clause 10 of the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 (hereinafter referred to as ‘RBI Circular’). As per clause 10 of the RBI Circular, the lenders may enter into an ICA for implementation of a RP.

3.4 On 26th August 2019, RHFL committed default in relation to the Debenture Trust Deeds issued as well.

3.5 In January 2020, IDBI Trusteeship Services Ltd., respondent No. 3 herein, filed a company petition bearing No. 138 of 2020 before National Company Law Tribunal, Mumbai (NCLT) under Section 71 (10) of the Companies Act, 2013 against RHFL and its holding company Reliance Capital Ltd., to make payment of Rs. 2,850 crore with interest due and payable to the debenture holders of RHFL, which includes the appellant herein.

3.6 During the pendency of the aforesaid petition, a RP for RHFL was submitted by AIIL on 19th June 2021, which, thereafter, was approved by the consortium of lenders who had entered into an ICA. Pertinently, 96% of the ICA lenders approved the RP. On 21st June 2021, a press note to that effect was published. On the same date, the NCLT, in the aforementioned company petition, directed RHFL to repay the debt owed to the debenture holders within five months. An appeal being Company Appeal (AT) No. 73 of 2021 against this order is pending before the National Company Law Appellate Tribunal, New Delhi (NCLAT).

3.7 It is pertinent to note that the RHFL RP, as submitted by AIIL and approved by the ICA lenders, provided that 19,353 small debenture holders, comprising of individuals and HUFs having an exposure up to Rs. 5 lakhs, would get 100% of their principal dues under the RP.

3.8 Since the RBI Circular only regulated the debts owed to Banks/Financial Institutions, the consent of the debenture holders had to be taken as per a SEBI Circular dated 13th October, 2020, titled ‘Standardisation of procedure to be followed by Debenture Trustee(