Real judgements, distilled

Legal Case Shots

Court judgements broken down into the case type, how the decision played out, and the lesson worth remembering, with the full judgement available as a PDF.

Frequently asked questions

Is this suitable for use in legal research and court filings?+

Legal Case Shots is built to help you quickly identify and understand relevant precedent. For citation in pleadings or filings, always verify against the full judgment PDF and current citation format (e.g., 2026 INSC ___).

How is a "lesson learnt" different from the judgment's holding?+

The holding is what the court legally decided. The lesson learnt translates that into a practical takeaway: what a lawyer should factor into case strategy or client advice as a result of this precedent.

Is the full judgment available, or just a summary?+

Both. Each case shows a distilled summary (case type, key holding, and lesson learnt) and links to the full judgment as a PDF for when you need the complete text for research or citation.

Can I filter judgments by date or case type?+

Yes. Use Advanced Filters to narrow results by decision date and by practice area, including Constitutional Law, Criminal Law, Service & Administrative Law, Family Law, Civil Property & Inheritance, and Labour & Industrial Law.

Can I search judgments by a specific judge?+

Yes. You can filter judgments by the judge or bench that decided the case, which is useful for tracking how a particular judge has reasoned on similar issues across multiple rulings.

What is Legal Case Shots?+

Legal Case Shots is a searchable database of Supreme Court of India judgments, each broken down into the case type, the court's key holding, and a practical lesson learnt, with the full judgment available as a PDF for citation or deeper reading.

Company & Insolvency LawSupreme Court of India

Phoenix ARC Pvt. Ltd. v. Ketulbhai Ramubhai Patel

Civil Appeal · 2021 INSC 59Decided 3 Feb 2021
Civil Appeal No. 5146 of 2019
Justice Ashok Bhushan · Justice R. Subhash Reddy · Justice M.R. Shah

Background

L&T Infrastructure Finance Company had lent Rs. 40 crores to Doshion Limited. As security for that loan, Doshion's group company, Doshion Veolia Water Solutions Private Limited (the "corporate debtor" in this case), pledged its 100% shareholding (40,160 shares) in another company, Gondwana Engineers Limited, under a Pledge Agreement. L&T later assigned its rights to Phoenix ARC. When insolvency proceedings began against Doshion Veolia itself (the share-pledging company, not the original borrower), Phoenix ARC claimed to be its "financial creditor" based on the pledge, but the Resolution Professional, the NCLT and the NCLAT all rejected this, holding the pledge was only security, not a guarantee creating a debt.

Decision Breakdown

The Supreme Court held that a "financial creditor" under Section 5(7)/5(8) of the IBC must be owed a "financial debt": money disbursed against consideration for the time value of money, or a guarantee/indemnity for such a debt. A pledge of shares as collateral security is legally different from a "contract of guarantee" under Section 126 of the Indian Contract Act, which requires a promise to perform or discharge another's liability on default; here, the corporate debtor never promised to repay Doshion Limited's loan, it only offered shares as security. Relying on its earlier decision in Anuj Jain (Jaypee Infratech), the Court reiterated that a person holding only a security interest over a corporate debtor's assets (even as a "secured creditor") stands outside the category of "financial creditor," because a financial creditor is meant to have a stake in the corporate debtor's revival and business, not merely in realising security value. The appeal was accordingly dismissed, while the Court clarified its findings were limited to this specific financial-creditor claim and would not affect Phoenix ARC's separate recovery proceedings pending before the Debts Recovery Tribunal.

Lesson Learnt

Merely pledging shares or other assets as collateral security for someone else's loan does not, by itself, make the asset-owner a "guarantor" or create a "financial debt" under the Insolvency and Bankruptcy Code: a secured creditor by collateral is legally distinct from, and has fewer rights than, a financial creditor in insolvency proceedings against that asset-owner.

Phoenix ARC Pvt. Ltd. v. Ketulbhai Ramubhai Patel – Legal Case Shots | LegalAware