NCLAT upholds Suraksha Realty resolution plan approval, rejects promoter appeals citing guarantor liability and Section 30(2) compliance

NCLAT dismissed appeals by promoters/directors challenging approval of Suraksha Realty's resolution plan for a real estate corporate debtor. The tribunal rejected challenges regarding income tax treatment as operational creditor, YEIDA claims, and guarantor subrogation rights, citing SC precedents that resolution plan approval doesn't discharge guarantor liability. NCLAT found no violation of Section 30(2) provisions and noted appellants lacked clean hands, having delayed homebuyer possession for years through appeals. The adjudicating authority's reliefs and concessions were deemed within jurisdiction.

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Issues Involved:

1. Locus standi of the appellants to challenge the resolution plan.
2. Treatment of Income Tax dues in the resolution plan.
3. Treatment of claims of YEIDA and whether YEIDA is a secured creditor.
4. Right of subrogation for guarantors.
5. Granting of reliefs and concessions by the Adjudicating Authority.
6. Consideration of 758 acres of land in the resolution plan.
7. Entitlement of applicants who intervened in the appeal.

Summary:

1. Locus Standi of the Appellants:
The appellants argued that they have sufficient locus standi to challenge the resolution plan as their objections were heard by the Adjudicating Authority and the Supreme Court in previous litigations. The tribunal acknowledged their locus standi, noting that their objections were considered on merits previously.

2. Treatment of Income Tax Dues:
The appellants contended that future dues of the Income Tax Department could not be written off. However, the tribunal noted that the Income Tax Department had already challenged the order, which was decided by the tribunal on 26.09.2023, holding that the treatment of the claim was in accordance with Section 30(2)(b) of the IBC. Hence, the appellants' challenge on this ground was dismissed.

3. Treatment of Claims of YEIDA and Secured Creditor Status:
The appellants argued that the resolution plan's treatment of YEIDA's claims violated Section 30(2) of the IBC. The tribunal noted that YEIDA had filed its own appeal challenging the treatment of its claims, and a settlement proposal was under consideration. Therefore, the tribunal decided that issues pertaining to YEIDA should be examined in YEIDA's appeal, not in the present appeal.

4. Right of Subrogation for Guarantors:
The appellants claimed that the resolution plan unlawfully extinguished their right of subrogation. The tribunal referred to the Supreme Court's judgment in "Lalit Kumar Jain vs. Union of India," which held that the approval of a resolution plan does not discharge the guarantor's liability. The tribunal upheld the resolution plan's clause extinguishing the right of subrogation, finding no violation of the law.

5. Granting of Reliefs and Concessions by the Adjudicating Authority:
The appellants argued that several reliefs and concessions granted by the Adjudicating Authority were impermissible. The tribunal examined the specific reliefs and found that they were necessary for the implementation of the resolution plan and did not violate any statutory provisions. The tribunal also noted that the successful resolution applicant had undertaken to implement the plan regardless of whether the reliefs and concessions were granted.

6. Consideration of 758 Acres of Land:
The appellants contended that the resolution plan did not consider the 758 acres of land released from encumbrances. The tribunal noted that the resolution plan included the land, as confirmed by the respondents' detailed reply, and found no merit in the appellants' submission.

7. Entitlement of Applicants Who Intervened in the Appeal:
The tribunal acknowledged the concerns of homebuyers regarding delays in project completion. It disposed of the intervention applications, directing applicants to approach the monitoring and implementation committee for their entitlements as per the resolution plan.

Conclusion:
The tribunal dismissed both appeals, finding no grounds to interfere with the Adjudicating Authority's order approving the resolution plan.

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