MODI RUBBER LTD. THROUGH ITS HEAD LEGAL AND COMPANY SECRETARY vs CONTINENTAL CARBON INDIA LTD. — C.A. No. 375/2017

Summary: Modi Rubber Ltd. v. Continental Carbon India Ltd. (C.A. No. 375/2017) Court's Decision: The Supreme Court held that unsecured creditors are bound by BIFR-approved rehabilitation schemes under SICA, 1985 and must accept scaled-down dues. The High Court's earlier decision allowing creditors to opt out was erroneous and set aside. Key Reasoning: Section 18(8) of SICA explicitly states sanctioned schemes bind "creditors" (including unsecured creditors). Permitting opt-outs would frustrate rehabilitation's purpose—creditors must sacrifice collectively for revival, or the company faces liquidation where unsecured creditors receive nothing anyway. This case analysis is maintained by casestatus.in based on publicly available court records.