DBS BANK LIMITED SINGAPORE versus RUCHI SOYA INDUSTRIES LIMITED AND ANOTHER

Citation: [2024] 1 S.C.R. 114 · Decided: 03-01-2024 · Supreme Court of India · Bench: SANJIV KHANNA · Disposal: Matter referred to larger bench
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Judgment (excerpt)

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[2024] 1 S.C.R. 114 : 2024 INSC 14
Case Details
DBS Bank Limited Singapore
v.
Ruchi Soya Industries Limited and Another
(Civil Appeal No. 9133 of 2019)
03 January 2024
[Sanjiv Khanna* and S.V.N. Bhatti, JJ.]
Issue for Consideration
Whether s.30(2)(b)(ii) of the Insolvency and Bankruptcy Code, 
2016, as amended in 2019, entitles the dissenting financial creditor 
to be paid the minimum value of its security interest; whether the 
amendments made in the substantive portion of s.30(2), in terms 
of Explanation 2 will be applicable when the first appeal was heard 
by NCLAT.
Headnotes
Insolvency and Bankruptcy Code, 2016 – s.30(2)(b)(ii) – 
Interpretation:
Held: s.30(2)(b)(ii) forfends the dissenting financial creditor from 
settling for a lower amount payable under the resolution plan – A 
financial creditor can dissent if the resolution plan is discriminatory 
or against a provision of law– However, a dissenting financial 
creditor cannot take advantage of s.30(2)(b)(ii) – A secured creditor 
cannot claim preference over another secured creditor at the stage 
of distribution on the ground of a dissent or assent, otherwise 
the distribution would be arbitrary and discriminative – Purpose 
of the amendment was only to ensure that a dissenting financial 
creditor does not get anything less than the liquidation value, but 
not for getting the maximum of the secured assets – There is a 
contradiction in the reasoning given in the judgment of this Court 
in India Resurgence ARC Private Limited v. Amit Metaliks Limited 
& Another [2021] 6 SCR 611, which is in discord with the ratio 
decidendi of the decisions of the three Judge Bench in Committee 
of Creditors of Essar Steel India Limited v. Satish Kumar Gupta 
& Ors [2019] 16 SCR 275 and Jaypee Kensington Boulevard 
Apartments Welfare Association & Others. v. NBCC (India) Limited 
& Others [2021] 12 SCR 603 – Provisions of s.30(2)(b)(ii) by 
[2024] 1 S.C.R. 
115
DBS BANK LIMITED SINGAPORE v. RUCHI SOYA INDUSTRIES 
LIMITED AND ANOTHER
law provides assurance to the dissenting creditors that they will 
receive as money the amount they would have received in the 
liquidation proceedings – This rule also applies to the operational 
creditors – This ensures that dissenting creditors receive the 
payment of the value of their security interest – Paragraph 17 
in India Resurgence is correct in its observations when it refers 
to the provisions of s.30(4) and that the voting is essentially a 
matter which relates to commercial wisdom of the CoC – The 
observation that a dissenting secured creditor cannot suggest 
that a higher amount be paid to it is also correct – However, this 
does not affect the right of a dissenting secured creditor to get 
payment equal to the value of the security interest in terms of 
s.30(2)(b)(ii) – Further, Paragraph 21 is partially correct – It is 
incorrect to state that the dissenting financial creditor would not 
be entitled to receive the liquidation value, the amount payable to 
him in terms of s.53(1) – Reasoning given in the earlier portion of 
paragraph 22 in conflict with the ratio in Committee of Creditors 
of Essar Steel India Limited as it does not take into account 
the legal effect of s.30(2)(b)(ii) – Present view taken different 
from India Resurgence ARC Private Limited on interpretation of 
s.30(2)(b)(ii) – Matter referred to larger Bench. [Paras 26, 27, 
31, 33, 36 and 49]
Insolvency and Bankruptcy Code, 2016 – s.30(2), Explanation 2 
– IBC (Amendment) Act, 2019 – Appellant had preferred the first 
appeal before the NCLAT on 31.07.2019 – The Amendment Act 
was notified and came into effect on 16.08.2019 – Applicability 
of the Amendment Act:
Held: Explanation 2(ii) clearly states that an appeal preferred 
u/s.61 or 62, when it is not barred by time under any provision of 
law, shall be heard and decided after considering the amended 
s.30(2)(b) under the Amendment Act – Clauses (i), (ii) and (iii) of 
Explanation 2 reflect the wide expanse and width of the legislative 
intent viz. the application of the Amendment Act, whether 
proceedings are pending before the adjudicating authority, the 
appellate authority, or before any court in a proceeding against 
an order of the adjudicating authority in respect of a resolution 
plan – Only when the resolution plan, as approved, has attained 
finality as no proceedings are pending, that the amendments will 
not apply to re-write the settled matter. [Para 22]
116
[2024] 1 S.C.R.
DIGITAL
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