Shankar Mukherjee and Anr. v. Ravi Sethia RP and Ors.

Important decision of NCLT Kolkata Bench:
(i) Code contemplates a scenario where a provision made to an operational creditor or dissenting financial creditor in a Resolution Plan could be lesser than what they would have got in the event of liquidation in terms liquidation value as per section 53(1).
(ii) That is the reason for the word “not less than” used in Section 30(2)(b). If the legislature wanted to restrict the amount payable to them to liquidation value at the most, then the words “not more than liquidation value” would have been used.
(iii) The code contemplates mandatory allocation to dissenting financial creditors and to operational creditors and the allocation would be the amount provided in the plan or liquidation value whichever is higher and the contention that such creditors can be paid NIL value because liquidation value for them is NIL, would defeat the very purpose of the beneficial amendment made in Section 30(2) of the I&B Code.
(iv) On careful examination of Section 30(2)(b) of the I&B Code, 2016 in our view, two legal propositions emerge:
(a) Reference to Section 53(1) of the I&B Code is only for the purpose of calculating the amount payable to operational creditors and dissenting financial creditors. Otherwise, there is no place for Section 53 (1) when it comes to the resolution of a corporate debtor under the CIR Process.
(b) The provision of some amount should be made for operational creditors as well as dissenting financial creditors, and the amount so provided cannot be NIL.