2023 (3) TMI 246 - SC - Insolvency & Bankruptcy

Approval of the Resolution Plan pertaining to its dissolution - dissenting debenture holders - power to mould relief and approve the RP - HELD THAT:- A Bench of three Judges of this Court, in the case of SECURITIES AND EXCHANGE BOARD OF INDIA VERSUS RAJKUMAR NAGPAL & ORS. [2022 (9) TMI 110 - SUPREME COURT], allowed the appeal, insofar as it held that the SEBI Circular would have retrospective application. However, this Court noted that the RCFL RP was extremely beneficial to debenture holders in as much that, for those with exposure upto Rs. 10 lakhs would receive 100% of their principal amount, whereas those with exposure of more than Rs. 10 lakhs would receive 29.96% of the principal amount, which is greater than the amount of recovery made by secured lenders, who would receive 24.96% of the principal amount.

In the present case also, small investors, whose exposure is up to Rs. 5 lakhs, are benefiting to the extent of 100% of their principal amount. Even debenture holders whose exposure is more than Rs. 5 lakhs are receiving 23.24% of their principal amount, similar to the case of Rajkumar Nagpal.

The facts in the present case are identical to the facts in the case of Rajkumar Nagpal. In the present case also, we find that a different voting mechanism proposed under the SEBI Circular will further delay the resolution process and potentially disrupt the efforts undertaken by the stakeholders, including the retail debenture holders. In the present case also, such unscrambling of the resolution process will not only prove time consuming but may also adversely affect the agreed realized gains to the retail debenture holders, who have already consented to the negotiated settlement before the High Court. We find that in the present case also, we should extend the benefit under Article 142 of the Constitution of India to the retail debenture holders. We are inclined to issue such directions to mould the relief in view of the particular facts and circumstances in the present case, which are similar to that in the case of Rajkumar Nagpal.

In exercise of the powers under Article 142 of the Constitution of India, the RP preferred by AIIL qua the debenture holders allowed, except the dissenting debenture holders.