Introduction
In a decision shaping the contours of India’s insolvency jurisprudence, the Supreme Court of India in EPC Constructions India Limited (Through Its Liquidator) v. Matix Fertilizers and Chemicals Limited[1] clarified that holders of Cumulative Redeemable Preference Shares (CRPS) cannot be treated as financial creditors under the Insolvency and Bankruptcy Code, 2016 (IBC).
The Court decisively held that preference shareholders are investors and not lenders, and their claims for redemption cannot constitute a “financial debt” capable of triggering insolvency proceedings under Section 7 of the IBC. Emphasizing the statutory distinction between share capital and debt, the Bench highlights that the IBC cannot be invoked as a…