Snehal upadhyay –
The Supreme Court held that no secured creditor can challenge a resolution plan rather than insisting a higher amount to be paid based on the security interest.
The bench comprising of Justice Vineet Saran and Justice Dinesh Maheshwari observed that it was against the rules laid under the bankruptcy code which makes a secured creditor entitled to the amount with respect to their security interest.
In this case, the appellant was challenging the resolution plan which was made approved for the insolvency of the Corporate Debtor, VPS Udyog Private Limited.
The appellant approached the Supreme Court when its contestations were made spurn by the National Company Law Tribunal, Kolkata and the National Company Law Appellate Tribunal.
The court said that the contestations made by the appellant on the resolution plan satisfy the court in its examination even if both the tribunals have had upheld the contestations already.
The bench stated “What we find is that the proposal for payment to all the secured financial creditors (all of them ought to be carrying security interest with them) is equitable and the proposal for payment to the appellant is at par with the percentage of payment proposed for other secured financial creditors. No case of denial of fair and equitable treatment or disregard of priority is made out”.
The court observed that the propositions of the appellant were made to be accepted then it would be against the purposes of the insolvency and bankruptcy code.
Lastly, the court stated that, “If the propositions suggested on behalf of the appellant were to be accepted, the result would be that rather than insolvency resolution and maximization of the value of assets of the corporate debtor, the processes would lead to more liquidations, with every secured financial creditor opting to stand on dissent. Such a result would be defeating the very purpose envisaged by the Code; and cannot be countenanced.”