Tribunal Approves Resolution Plan under Insolvency Code, Binding on Debtor & Stakeholders

The Tribunal approved the Resolution Plan under Section 31(1) of the Insolvency and Bankruptcy Code, 2016, declaring it binding on the corporate debtor and stakeholders. Despite objections raised by homebuyers, the plan was approved by the Committee of Creditors with a 100% voting share. The plan complied with statutory requirements and offered a higher value than liquidation. The Tribunal directed the Resolution Professional to forward all relevant records to the Insolvency and Bankruptcy Board of India, and the approved plan became effective immediately. IA No. 3542/2020 was rejected, and IA No. 1303/2020 was admitted and disposed of accordingly.

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Issues Involved:
1. Approval of the Resolution Plan under Sections 30(6) and 31 of the Insolvency and Bankruptcy Code (IBC), 2016.
2. Objections raised by homebuyers regarding the Resolution Plan.
3. Compliance with statutory requirements under the IBC and related regulations.

Issue-wise Detailed Analysis:

1. Approval of the Resolution Plan:

The application was filed by the Resolution Professional (RP) seeking approval of the Resolution Plan under Sections 30(6) and 31 of the IBC, 2016. The Resolution Plan was approved by the Committee of Creditors (CoC) with a 100% voting share during the twelfth CoC meeting. The RP conducted the Corporate Insolvency Resolution Process (CIRP) as per the regulations and performed various tasks as per the provisions of the Code. The fair value of the corporate debtor was Rs. 262.77 Crores, and the liquidation value was Rs. 135.28 Crores. The Resolution Plan, submitted by a consortium comprising Trident Infrahomes Private Limited and Romano Infrastructure Private Limited, was approved by the CoC and met the requirements of Section 31 of the Code and Regulation 39 of the IBBI (CIRP) Regulations, 2016.

2. Objections Raised by Homebuyers:

Twenty homebuyers filed objections against the Resolution Plan, arguing various illegalities and non-compliances. They claimed that the RP failed to conduct a transparent and fair resolution process. Specific objections included:
- Faulty Information Manual: The IM was allegedly defective, failing to factor in refunds made to some homebuyers and the status of joint ventures.
- Lack of Forensic Audit: The RP failed to complete a forensic audit despite repeated reminders.
- Preferential Treatment: The plan allegedly favored financial creditors (banks) over homebuyers.
- Differential Treatment: The plan was discriminatory towards flat buyers compared to plot owners.
- Intimidation and Misleading: Homebuyers were allegedly misled and intimidated into voting in favor of the plan.

Despite these objections, the CoC, comprising HDFC Bank, Axis Bank, and an association of homebuyers, approved the plan with a 100% voting share. The Tribunal noted that the commercial wisdom of the CoC should not be interfered with by the adjudicating authority, and the plan offered a higher value than liquidation.

3. Compliance with Statutory Requirements:

The Tribunal examined the compliance of the Resolution Plan with the statutory requirements set out in the IBC, 2016, and related regulations. The Resolution Plan complied with Section 30(1), Section 30(2)(a), Regulation 38(1A), Section 30(2)(b), Regulation 38(2)(c), Section 30(2)(c), Section 30(2)(d), Section 30(2)(e), and Section 30(4) of the IBC, 2016. The plan provided for the payment of insolvency process costs, treatment of operational creditors, and supervision of plan implementation. The plan did not contravene any provisions of law and was approved by the CoC with 100% voting share.

Conclusion:

The Tribunal approved the Resolution Plan under Section 31(1) of the IBC, 2016, declaring it binding on the corporate debtor, its members, employees, creditors, and other stakeholders. The moratorium order passed under Section 14 of the Code ceased to have effect. The RP was directed to forward all records relating to the CIRP process and the resolution plan to the IBBI. The approved Resolution Plan became effective from the date of the order. IA No. 3542/2020 was rejected, and IA No. 1303/2020 was admitted and disposed of accordingly.

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