Tribunal rejects settlement plans, orders creditors meeting. Hearing set for November 25.

The Tribunal rejected the settlement plans due to a lack of consensus and trust deficit among allottees, directing the IRP/RP to convene a Committee of Creditors meeting within ten days to determine the next steps for completing the Corporate Insolvency Resolution Process of the Debtor. The appeal was scheduled for a hearing on 25th November 2021, with parties instructed to submit their notes before the next hearing.

---

---

Issues Involved:
1. Admission of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Interim stay order restraining the Constitution of Committee of Creditors.
3. Filing and modification of the settlement plan by the Appellant.
4. Objections against the modification application and settlement plan.
5. Status report by the Interim Resolution Professional (IRP).
6. Trust deficit among homebuyers and the feasibility of the settlement plan.
7. Directions for the continuation of the Corporate Insolvency Resolution Process (CIRP).

Issue-wise Detailed Analysis:

1. Admission of the Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The appeal was filed against the order of the Adjudicating Authority passed on 22nd November 2019, admitting the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, and appointing Interim Resolution Professional (IRP) Mr. Bhim Sain Goyal.

2. Interim Stay Order Restraining the Constitution of Committee of Creditors:
On 19th December 2019, the Appellate Tribunal passed an interim stay order restraining the Constitution of Committee of Creditors (CoC).

3. Filing and Modification of the Settlement Plan by the Appellant:
The Appellant filed IA No. 1115 of 2020 for modification of the order dated 26th February 2020. The Appellant claimed to have filed a settlement plan detailing the completion of the housing project and requested the modification of the order to allow the Appellant to work on the proposal. The Appellant argued that the settlement plan filed on 13th February 2020 covered all the allottees and that funds had been arranged to complete the project.

4. Objections Against the Modification Application and Settlement Plan:
Interveners and non-applicants filed objections against the modification application, arguing that the application was against the interest of home buyers/financial creditors and the purpose of the IBC. They contended that the settlement agreement proposed by the Appellant did not encompass all home buyers, leading to the Tribunal's order on 26th February 2020 to proceed with the CIRP.

5. Status Report by the Interim Resolution Professional (IRP):
The IRP submitted a status report on 26th March 2021, detailing the construction status, funds flow, concerns of homebuyers, and contractor’s concerns. The report indicated that the project was approximately 70% complete and highlighted the financial and logistical challenges in completing the project. The IRP also noted the lack of consensus among homebuyers and the concerns regarding the trustworthiness of the Appellant.

6. Trust Deficit Among Homebuyers and the Feasibility of the Settlement Plan:
The Tribunal observed a significant trust deficit among homebuyers regarding the Appellant's ability to complete the project. Some homebuyers supported the reverse CIRP, while others preferred the project to be completed through the CIRP process due to distrust in the Appellant. The Tribunal noted that the proposed reverse insolvency appeared to be a device for buying time, and there was no consensus among allottees for the settlement plan.

7. Directions for the Continuation of the Corporate Insolvency Resolution Process (CIRP):
The Tribunal concluded that the settlement plan dated 13th February 2020 and the revised settlement plan dated 15th March 2021 deserved to be rejected due to the lack of consensus and trust deficit among the allottees. The Tribunal directed the IRP/RP to hold a meeting of the Committee of Creditors within ten days to decide the future course of action for the completion of the CIRP of the Corporate Debtor. The appeal was listed for hearing on 25th November 2021, with instructions for parties to file their notes of submission in both soft and hard copies before the next hearing date.

---