IBC Minimum Payments: Operational and Dissenting Creditors

A resolution plan is a commercial bargain, but the Code sets two floors: one for operational creditors, who have no vote, and one for financial creditors who vote against or abstain. Questions require the student to compute both floors from the figures given, apply the 2026 change for dissenting financial creditors, and decide whether a plan that meets the floors can still be attacked as unfair. Each answer below shows the working.

1. The Law in Brief

Figure 1: The two statutory floors

• Operational creditors, section 30(2)(b). Not less than the higher of what they would receive in liquidation under section 53, and what they would receive if the amount payable under the plan were distributed in the order of section 53(1)
• Dissenting financial creditors, section 30(2)(ba). Inserted in 2026: not less than the lower of what they would receive in liquidation under section 53 and what they would receive if the plan value were distributed under section 53(1); Explanation I requires the distribution to be fair and equitable to them.
• Beyond the floors. Distribution is for the committee's commercial wisdom; there is no rule of equal treatment (Essar Steel, 2019; Pratap Technocrats, 2021)

2. How Is the Operational Creditors' Minimum Calculated?

• Issue. The minimum the plan must pay operational creditors under section 30(2)(b)
• Law. Operational creditors must receive at least the higher of (i) their liquidation amount under section 53 and (ii) the amount they would receive if the plan value were distributed in the order of section 53(1)
• Application. In liquidation, ₹200 crore covers costs (₹10 crore) and workmen (₹20 crore), leaving ₹170 crore for secured creditors owed ₹400 crore; operational creditors get nothing. If ₹600 crore is distributed under section 53(1), costs, workmen and secured creditors take ₹430 crore, employees ₹10 crore, unsecured financial creditors ₹100 crore and government dues ₹30 crore, a total of ₹570 crore, leaving ₹30 crore for operational creditors. The higher of nil and ₹30 crore is ₹30 crore.
• Conclusion. The plan must pay operational creditors at least ₹30 crore. An offer of ₹10 crore does not comply with section 30(2)(b), and the NCLT should send the plan back to the committee to rectify the defect under the 2026 proviso to section 31(2), rather than modify it.

Figure 2: Working the waterfall amount for operational creditors

3. What Must a Dissenting Financial Creditor Get after 2026?

• Issue. The minimum payable to a dissenting financial creditor under section 30(2)(ba)
• Law. Section 30(2)(ba), inserted in 2026, requires the plan to pay financial creditors who do not vote in favour not less than the lower of their liquidation amount under section 53 and the amount they would receive if the plan value were distributed under section 53(1). The distribution must be fair and equitable to them (Explanation I), and Explanation II limits the new rule's application to processes that had already reached certain stages before the amendment.
• Application. In liquidation, ₹170 crore is shared rateably by secured creditors owed ₹400 crore, so CD Bank would receive 100/400 of ₹170 crore, that is ₹42.5 crore. Under the waterfall of ₹600 crore, it would receive its full ₹100 crore. The lower figure is ₹42.5 crore.
• Conclusion. CD Bank is entitled to at least ₹42.5 crore, not ₹100 crore. An offer of ₹30 crore is below the floor and the plan does not comply. Under the pre-2026 law the floor was the liquidation amount, giving the same figure here; the new rule makes a difference where the plan value is lower than the liquidation value.

4. Can Dissenters Be Paid in Flats or after Assenting Creditors?

• Issue. Whether a dissenting financial creditor may be paid its minimum in kind, and whether it may be paid after assenting creditors.
• Law. In Jaypee Kensington Boulevard Apartments Welfare Association v NBCC (2021), the Supreme Court held that a dissenting financial creditor must receive its minimum entitlement in money, not in kind such as land or flats, though it may be allowed to enforce its security to that extent. The CIRP Regulations require the amount due to dissenting financial creditors to be paid in priority to financial creditors who voted in favour.
• Application. The plan pays GH Bank in flats, and after the assenting creditors are paid in cash.
• Conclusion. The plan does not comply in either respect. It should be returned to the committee to provide for payment of at least ₹50 crore to GH Bank in money, ahead of assenting financial creditors.

5. Must Operational Creditors Get the Same Percentage?

• Issue. Whether a plan that meets the statutory minimum can be set aside or modified because operational creditors receive a lower percentage than financial creditors.
• Law. In Committee of Creditors of Essar Steel v Satish Kumar Gupta (2019), the Supreme Court held that equality is not required between financial and operational creditors or between secured and unsecured creditors, and set aside the NCLAT's redistribution; the committee must, however, consider the interests of operational creditors. In Pratap Technocrats (2021), the Court held that the tribunals have no residual equity jurisdiction to rework a plan that meets the statutory requirements. Section 61(3)(iii) allows an appeal only if operational creditors' debts are not provided for as the law requires.
• Application. Operational creditors receive more than their floor, and the difference in percentages reflects their different position.
• Conclusion. The appeal must fail. The NCLAT cannot redistribute proceeds on grounds of fairness when the statutory minimum is met.

6. Frequently Asked Questions

Is a dissenting secured creditor entitled to the value of its security?

India Resurgence ARC (2021) said no beyond the statutory minimum, while DBS Bank v Ruchi Soya (2024) took a different view and referred the conflict to a larger bench; the 2026 floor in section 30(2)(ba) now governs the minimum (Topic 41).

7. Related Topics

• Topic 41: Operational and Dissenting Creditors in Plans. The minimum payments in detail.
• Topic 57: Section 53. The waterfall mechanism.
• Topic 116: Government Dues under IBC after 2026. Statutory dues after 2026.