SC Holds That Amounts Paid Towards Preference Shares Are Not Loans And Do Not Qualify As Debt Under IBC

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The SC, in EPC Constructions India Ltd. v. Matix Fertilizers & Chemicals Ltd., has, inter alia, held that preference shares are part of a company's share capital and therefore, the amounts paid towards preference...

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The SC, in EPC Constructions India Ltd. v. Matix Fertilizers & Chemicals Ltd.,¹ has, inter alia, held that preference shares are part of a company's share capital and therefore, the amounts paid towards preference shares are not loans and consequently do not qualify as 'debt' under IBC. The Court also held that non-redemption of preference shares does not make the preference shareholder a financial creditor of the company.

Footnote

1 EPC Constructions India Ltd. v. Matix Fertilizers & Chemicals Ltd., 2025 SCC OnLine SC 2293.

Originally published 30 January 2026

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SC Holds That Amounts Paid Towards Preference Shares Are Not Loans And Do Not Qualify As Debt Under IBC

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