Operational Creditor Payment Comparison: employees satisfy Section 30(2)(b) when plan payments exceed liquidation entitlement and unsecured creditor percentage.

Interprets the mandate that operational creditors must receive not less than the higher of their liquidation entitlement or the percentage payable to unsecured financial creditors, applying a comparative payout test to practical allocations. Where admitted liquidation entitlement of operational creditors is nil and the resolution plan awards employees a higher percentage than unsecured financial creditors, the statutory benchmark in Section 30(2)(b) is met; the recorded undertaking on employee payout is therefore satisfied and the plan approval stands, with no interference in the appeal.

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Issues: Whether the Adjudicating Authority's approval of the resolution plan complied with the requirement that operational creditors (employees) receive not less than the higher of (i) their liquidation entitlement or (ii) the percentage payable to unsecured financial creditors, and whether the order dated 05.12.2025 recording the undertaking regarding employees' payout was contravened.

Analysis: The resolution plan earmarked a fixed aggregate amount for employees and proposed payments which, when compared with amounts payable to unsecured financial creditors under the plan, resulted in employees receiving a higher percentage than unsecured financial creditors. The admitted liquidation value of operational creditors was nil given the insufficiency of the plan consideration against secured creditors' claims. The relevant statutory benchmark is the requirement in Section 30(2)(b) of the Insolvency and Bankruptcy Code that operational creditors be paid not less than the higher of (i) the amount payable in liquidation or (ii) the amount that would be paid if distribution followed the priority in section 53. The order recorded on 05.12.2025 stated that employees' payout would be the higher of twelve months' entitlement or the percentage payable to unsecured financial creditors; the practical application requires comparison of actual percentages under the resolution plan and liquidation realizations. The figures on record show unsecured financial creditors were to receive approximately 0.96% of their claims while employees were allocated amounts greater than that percentage and greater than their liquidation entitlement (which was nil). The undertaking recorded on 05.12.2025 is therefore satisfied when assessed by the comparative payout test mandated by Section 30(2)(b). No valid ground was established for interfering with the approval of the resolution plan.

Conclusion: Appeal dismissed; the approval of the resolution plan is in compliance with Section 30(2)(b) and the 05.12.2025 undertaking was not contravened.

Ratio Decidendi: Where a resolution plan allocates payments such that operational creditors receive a percentage higher than that payable to unsecured financial creditors and their liquidation entitlement is nil, the requirement of Section 30(2)(b) that operational creditors receive not less than the higher of liquidation entitlement or the percentage payable to unsecured financial creditors is satisfied.

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