2026 Supreme(Online)(NCLT) 2758

NATIONAL COMPANY LAW TRIBUNAL
Nilesh Sharma, Member (Judicial), Charanjeet Singh Gulati, Member (Technical)
IndusInd Bank Ltd – Appellant
Versus
Pradeep Kabra – Respondent
IA/70/2025 | C.P. (IB)/163(MB)2023 | CP (IB) NO. 163/MB/2023

A dissenting financial creditor holding a sole and exclusive charge over a specific asset is entitled to receive the minimum liquidation value referable to that security interest under Section 30(2)(b)(ii) and Section 53(1) of the IBC.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 30(2)(b), 30(4), 31, 52, 53(1), and 60(5) - Companies Act, 2013 - Section 77 - SARFAESI Act, 2002 - IBC (CIRP) Regulations, 2016 - Regulation 35 and 38 - Dissenting secured financial creditor holding sole and exclusive charge over a specific asset of the corporate debtor is entitled to receive the minimum liquidation value referable to its security interest under Section 30(2)(b)(ii) read with Section 53(1) of the Code. The distribution mechanism adopted by the Committee of Creditors (CoC) cannot override this statutory minimum entitlement. (Paras 34, 36-50)

(B) Commercial wisdom of CoC - The Adjudicating Authority cannot substitute its view for the commercial wisdom of the CoC, but the CoC cannot adopt a distribution mechanism that defeats the minimum statutory entitlement of a dissenting financial creditor under Section 30(2)(b)(ii) of the Code. The commercial wisdom of the CoC must remain within the bounds of the Code and in conformity with its provisions. (Paras 47-48)

(C) The judgment in DBS Bank Limited Singapore v. Ruchi Soya Industries Limited & Another (2024) 3 SCC 752, held that a dissenting financial creditor is entitled to a minimum value in monetary terms equivalent to the value of its security interest, and Section 30(2)(b)(ii) cannot be read down. The judgment in India Resurgence Arc Pvt. Ltd. v. M/s. Amit Metaliks Ltd. & Anr. is distinguishable as it did not deal with a situation where the dissenting creditor holds a sole and exclusive charge. (Paras 41-42, 51-52)

Facts of the case:
The applicant, a secured financial creditor, held a sole and exclusive charge over a land parcel of the corporate debtor valued at approximately Rs. 19.59 crores. It had a 23.4% voting share in the CoC. The majority creditor, with 76.6% voting share, approved a resolution plan that distributed proceeds based on admitted claim/voting share, not the value of security interests. As a dissenting financial creditor, the applicant was allocated only Rs. 6.08 crores under the plan, while its minimum liquidation value based on its exclusive security interest was Rs. 19.59 crores.

Findings of Court:
The distribution under Resolution No. 3 was not in accordance with the Code and affected the applicant's statutory entitlement. The liquidation value distribution table in the plan had no legal basis under Section 53. The court held that the applicant, as a dissenting secured financial creditor with sole and exclusive charge, is entitled to the minimum liquidation value of Rs. 19,59,39,500/- corresponding to its security interest.

Issues: Whether a dissenting financial creditor holding sole and exclusive charge over a specific asset of the corporate debtor is entitled to receive the minimum liquidation value of that asset under Section 30(2)(b)(ii) of the IBC.

Ratio Decidendi: Section 30(2)(b)(ii) guarantees dissenting financial creditors the minimum liquidation value as per Section 53(1). Where a creditor holds a sole and exclusive security interest over an asset that constitutes nearly the entirety of the corporate debtor's liquidation value, its entitlement cannot be determined dehors the value of that security interest. The CoC's commercial wisdom cannot override this statutory mandate. Result : IA disposed of with direction that distribution under the resolution plan be brought in conformity with Section 30(2)(b) read with Section 53 of the Code.

Table of Content
1. parties and relief sought in ia under section 60(5) ibc. (Para 2 , 3 , 4 , 5)
2. applicant's factual background: loan, guarantee, security, cirp, and claim. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18)
3. applicant's legal submissions and case law reliance. (Para 19)

1. The present IA dated 04.11.2024 has been filed by the IndusInd Bank Limited (‘the Applicant’) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (‘IBC/the Code’) read with Rule 11 of National Company Law Tribunal Rules, 2016 (‘NCLT Rules’) with the following prayers:

(a) reject the application filed by Respondent No. 1 under Section

31 of Insolvency & Bankruptcy Code, 2016 for approval of resolution plan submitted by OCL Iron & Steel Limited, and pass consequential order under Section 33 of Insolvency & Bankruptcy Code, 2016 for initiating liquidation process of the Corporate Debtor;

(b) pass an order permitting the Applicant to withdraw its security interest and to realise the same outside the liquidation process in accordance with law;

(c) In the alternative and strictly without prejudice to prayer clauses (a) and (b), pass an order to:

i. set aside Resolution No. 3 passed in the 13^th meeting of Committee of Creditors, and;

ii. remand the resolution plan submitted by OCL Iron & Steel Limited/Respondent No.3 for reconsideration before the Committee of Creditors, and;

iii. direct the Respondents to provide minimum liquidation value commensurate with the value of the security interest held by the creditors and ensure that a Resolution Plan made and voted upon is in compliance of the provisions of the Code.

(d) In the alternative and strictly without prejudice to prayer clauses (a) to (c), direct OCL Iron & Steel Limited/Respondent No.3 to provide minimum liquidation value of Rs.19,72,12,274.93 to the Applicant under the Resolution Plan;

(e) pending hearing, adjudication and final disposal of the present application, keep in abeyance the hearing, adjudication and pronouncement of orders in application filed by Respondent No. 1 under Section 31 of Insolvency & Bankruptcy Code, 2016 for approval of resolution plan submitted by OCL Iron & Steel Limited, being Interlocutory Application filing No.

2709138091392024;

(f) pass any other order, grant any other relief or issue any other direction as this Hon'ble Tribunal may deem fit, proper or necessary in the interest of justice; and (g) Costs Particulars of the Parties:

2. The Applicant is a secured financial creditor of Precision Realty Developers Private Limited (“Corporate Debtor”) and holds 23.4%

voting share in the Committee of Creditors (“CoC”).

3. Pradeep Kabra, Respondent No.1, is the Resolution Professional of the Corporate Debtor.

4. Phoenix ARC Private Limited, Respondent No.2, is an Asset Reconstruction Company and a financial creditor of the Corporate Debtor, holding 76.6% voting share in the CoC.

5. OCL Iron & Steel Limited, Respondent No.3, has been declared the Successful Resolution Applicant by the CoC.

Brief facts as per the Application;

6. In March 2017, Nice Texcot Trading & Agency Pvt. Ltd (‘Borrower’)

approached the IndusInd Bank Limited (‘the Applicant’) for financial assistance for its long-term and working capital requirements. Accordingly, the Applicant sanctioned various term loan and credit facilities, modified from time to time through sanction letters dated 14.03.2017, 17.03.2017, 30.03.2017, 22.03.2021 and 28.06.2021

7. It is submitted that, due to financial stress caused by the COVID-19 pandemic in 2020, the Borrower sought restructuring under the RBI Resolution Framework dated 06.08.2020. Pursuant thereto, the Applicant issued a fresh Sanction Letter dated 28.06.2021 sanctioning a total credit limit of Rs. 118.13 crore (including the existing limit of Rs. 108.83 crore and a Funded Interest Term Loan (FITL) of Rs. 9.30 crore) and a Supplementary Term Loan Agreement dated 28.06.2021 was executed. To secure the said facilities, The Precision Realty Developers Priva

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