A Bench of Justices JB Pardiwala and KV Viswanathan dismissed an appeal filed by EPC Constructions India Ltd (in liquidation) against Matix Fertilizers and Chemicals Ltd, affirming the findings of the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) that the preference shares held by EPC represented an investment and not a financial debt.
The Court reiterated that preference shareholders remain members of a company and cannot claim the rights of creditors, even if the redemption period of the shares has expired.
“Section 5(8)(c) of IBC does not talk of preference shares while it talks of note purchase facility, bonds, notes, debentures, loan stock, or any other similar instrument to the categories…