The Supreme Court on 27 October 2026 upheld the exclusion of ECL Finance and its debenture trustee from Palm Developers’ committee of creditors because their contractual rights involved participation in the debtor’s policymaking.
Judge / Bench — J.B. Pardiwala and K. Vinod Chandran, JJ.; judgment by K. Vinod Chandran, J.
In ECL Finance Ltd. v. Abhinav Mukherjee, 2026 INSC 1159, the Court distinguished the stricter control test governing resolution applicants. A role in guiding policy suffices for the related-party restriction on creditor participation.
The financing documents conferred extensive rights over directors, budgets, management and sales. The Court also rejected a recent debt assignment as an attempt to avoid the restriction. Both appeals were dismissed and the contempt petitions closed.
Advocates appearing — Appellants: Gaurav Mitra, Senior Counsel. Respondents: Jayant Mehta and Arijit Prasad, Senior Counsel.