Tribunal Decides on Subvention Scheme Buyers' Claims, Clarifies RP's Role

The Tribunal rejected the creation of a separate sub-class for subvention scheme home buyers but directed the Resolution Professional to consider claims of buyers who submitted cancellation affidavits without refunds. The appointment of an authorized representative for subvention buyers was denied due to the absence of sub-classes. The RP was tasked with addressing claims for cancellation and refunds uniformly among affected buyers. The Tribunal clarified the RP's role as facilitative rather than negotiative, granting relief on specific claims while adhering to the legal framework of the Insolvency and Bankruptcy Code, 2016.

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Issues:
1. Relief sought by home buyers under section 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Non-payment of pre-EMI interest under subvention scheme.
3. Recognition and treatment of subvention scheme home buyers' claims within the Corporate Debtor's resolution plan.
4. Appointment of authorized representative for subvention buyers in CoC meetings.
5. Consideration of claims for cancellation and refund by affected buyers.
6. Role and responsibilities of the Resolution Professional in addressing home buyers' grievances.

Issue 1: Relief sought by home buyers under section 60(5) of the Insolvency and Bankruptcy Code, 2016

The 31 Home buyers sought various reliefs, including postponing the voting on the proposed Resolution Plan, amending the admitted amount of claim to include pre-EMI interest, correcting the Information Memorandum, appointing an authorized representative for subvention buyers, and considering claims of buyers who had submitted cancellation affidavits. The applicants highlighted the Corporate Debtor's failure to pay pre-EMIs, leading to threats of non-payment and cancellation of units. The Resolution Professional (RP) acknowledged the complexity of subvention buyers' claims and suggested collating claims to address the issue effectively. However, the RP did not directly include the applicants in the Information Memorandum, leading to concerns about their grievances not being recognized in CoC meetings.

Issue 2: Non-payment of pre-EMI interest under subvention scheme

The RP's reply emphasized that the main grievance of the applicants was the non-payment of pre-EMI interest. The RP stated that negotiations on the Resolution Plan did not include pre-EMI interest for the applicants under the subvention scheme. The RP highlighted discrepancies in principal amounts claimed by some applicants and reserved the right to reconcile these amounts. The RP also mentioned that the applicants' demands for pre-EMI interest were addressed during CoC meetings, with responses provided by the Prospective Resolution Applicants (PRAs).

Issue 3: Recognition and treatment of subvention scheme home buyers' claims within the Corporate Debtor's resolution plan

The Tribunal rejected the applicants' prayers for creating a separate sub-class of homebuyers within the Class of Homebuyers as Financial Creditors. The Tribunal stated that the Insolvency & Bankruptcy Code does not recognize such sub-classes. However, the Tribunal directed the RP to consider the claims of buyers who had submitted cancellation affidavits but had not received refunds, revoking unit cancellations and ensuring equal treatment with other Homebuyers in terms of claims, rights, and obligations.

Issue 4: Appointment of authorized representative for subvention buyers in CoC meetings

The Tribunal rejected the prayer for appointing an authorized representative for subvention buyers, as the Code does not allow for sub-classes of homebuyers. Therefore, the request for a separate representation was not granted.

Issue 5: Consideration of claims for cancellation and refund by affected buyers

The Tribunal directed the RP to consider the claims of buyers who had submitted cancellation affidavits but had not received refunds. These buyers were to be treated on par with other Homebuyers regarding their claims, rights, and obligations.

Issue 6: Role and responsibilities of the Resolution Professional in addressing home buyers' grievances

The Tribunal emphasized that the RP's role is not to negotiate but to facilitate the process, leaving the treatment of debts to the Resolution Applicant and approval to the CoC. The Tribunal disposed of the application, granting relief on specific claims while rejecting others based on the legal framework of the Insolvency & Bankruptcy Code.

This detailed analysis of the judgment addresses the key issues raised by the home buyers and the responses provided by the Tribunal, RP, and other involved parties within the legal framework of the Insolvency and Bankruptcy Code, 2016.

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