MODI RUBBER LTD. vs CONTINENTAL CARBON INDIA LTD.

The Supreme Court examined a dispute involving unsecured creditors' rights during the rehabilitation process of a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985. The High Court had allowed an unsecured creditor to opt out of the scaled-down debt settlement and wait for the company's rehabilitation scheme to be completed before recovering its dues. The Court analyzed the legal provisions governing creditor rights during insolvency and rehabilitation, emphasizing the importance of protecting unsecured creditors' options. The judgment clarified the legal position, affirming the creditor’s right to wait for the scheme's completion before recovery.