The Insolvency and Bankruptcy Code, 2016 draws a sharp distinction between financial creditors (FCs) and operational creditors (OCs), based on the premise that financial debt embodies the time value of money (TVM). Building on this, the Code presumes that FCs possess commercial wisdom and the willingness and ability to defer repayment. Accordingly, it accords FCs primacy in the insolvency process: they control it, determine its outcome, and enjoy priority in the distribution waterfall. OCs, by contrast, stand at the periphery, procedurally and substantively.

This distinction, however, rests on a misconception. TVM is a basic economic principle: a rupee today is worth more than a rupee tomorrow. Conversely, a rupee receivable in the future is worth less today. If one parts with ₹100 today

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