In Brief
IFCI Limited invested Rs. 125 crores in a highway project through Compulsorily Convertible Debentures (CCDs) issued by ICTL, a subsidiary of IVRCL. The CCDs were mandatorily convertible into equity in December 2017. When ICTL faced financial difficulties, IFCI filed claims in the insolvency process, but the Resolution Professional rejected the claims, treating the amount as equity rather than debt. IFCI appealed, arguing the investment should be reclassified as debt due to the project's financial failure. The Supreme Court dismissed the appeal, holding that CCDs—by their express contractual terms—must be classified as equity instruments. The contractual documents clearly designated CCDs as part of the project's equity component, and nowhere did they stipulate conversion to debt upon any event. The Court emphasized that commercial contracts must be interpreted as written, without implying additional terms.
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