IBC | Preference Share Holders Are Investors, Not 'Financial Creditors'; Can't File Insolvency Petition : Supreme Court

Yash Mittal

28 Oct 2025 7:35 PM IST

  • IBC | Preference Share Holders Are Investors, Not Financial Creditors; Cant File Insolvency Petition : Supreme Court

    Preference shares are part of the company's share capital and the amounts paid up on them are not loans.

    The Supreme Court on Tuesday (October 28) held that holders of Cumulative Redeemable Preference Share (“CRPS”) are investors, and not financial creditors, and therefore cannot initiate insolvency proceedings under Section 7 of the IBC, since non-redemption of such shares does not constitute a “default” under the IBC. “It is well settled in Company Law that preference shares are part...

    Yash Mittal

    Yash Mittal

    Yash Mittal is a Correspondent with LiveLaw, covering the Supreme Court of India

    Next Story