The Supreme Court has upheld the exclusion of a debenture holder, its trustee and a subsequent debt assignee from the Committee of Creditors (CoC) of a real estate company, holding that participation in the corporate debtor’s policy-making processes can attract the related-party disqualification under the Insolvency and Bankruptcy Code, 2016 (IBC).
A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran dismissed appeals challenging the exclusion of ECL Finance Limited and IDBI Trusteeship Services Limited from the CoC of Palm Developers Private Limited.
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The Court explained that establishing a related-party relationship through participation in policy-making under Section…