Creditors Belonging To Different Classes Can Be Given Different Treatment : NCLAT [Read Judgment]

The National Company Law Appellate Tribunal has reconfirmed the principle that the touchstone for judging the benevolence of a resolution plan does not depend upon the manner wherein differently placed creditors are treated therein. It was argued on behalf of the COC that the 2% of their respective claim amounts allocated to the Operational Creditors under the resolution plan, was more than the amount the Appellant and other Operational Creditors would have received in the event of liquidation of the Corporate Debtor and accordingly the resolution plan met the requirement of S.30 of the Code. It was stressed that the amount to be paid to the Operational Creditors has to be higher of either the amount to be paid to such Operational Creditors under Section 53 of the Code in the event of liquidation of the Corporate Debtor or the amount under the resolution plan when distributed in accordance with the order of priority in sub-section of Section 53. The bench appreciating the arguments advanced on behalf of the COC held that when the Resolution Plan was being discussed the Operational Creditors had objected to the 2% allocation for Operational Creditors and the minutes show that the Resolution Applicant had expressed that it will not be possible for it to pay such a high amount.