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Issues involved: Appeal against interim order restraining alienation of assets, validity of Corporate Debt Restructuring (CDR) scheme, creditor's right in winding up.
Interim Order Challenge: The appeal challenged an interim order restraining the appellant Company from alienating assets, filed by the respondent for winding up. The appellant Company argued its financial health, participation in CDR process, and approval of restructuring terms by secured creditors. The appellant sought to sign the CDR agreement to avoid adverse consequences. CDR Scheme Validity: The appellant Company highlighted its participation in the CDR process initiated by RBI, approval of restructuring terms by secured creditors, and the need for additional charge creation for CDR facilities. The appellant emphasized the benefits of the CDR process for all stakeholders, including protection for unsecured creditors like the respondent. Creditor's Right in Winding Up: The respondent, a bondholder, opposed the CDR process, citing doubts about its viability and concerns about dilution of security. The court considered the urgency, viability of the revival scheme, and the impact on various stakeholders. It noted the support of secured creditors for revival over winding up. Judgment: The court modified the interim order, allowing the appellant to execute the Master Restructuring Agreement under the CDR process. The court clarified that new encumbrances created under CDR shall not prejudice the respondent's rights, subject to further orders. The parties were directed not to claim equities, and the appeal was disposed of.
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