Resolution plan approval upheld as affected homebuyer categorization confirmed without required NOC from LICHFL

The NCLAT dismissed appeals challenging a resolution plan approval. The tribunal held that appellant's categorization as affected homebuyer was correct since their allotment was made without required NOC from LICHFL. The court rejected claims of backdoor entry into CIRP, noting the CoC properly rescinded earlier Form-G and issued fresh advertisement, with respondent submitting EOI within timeline. The tribunal found no procedural violations by the Resolution Professional in conducting CIRP. Citing Supreme Court precedent in Jaypee Kensington case, the court emphasized that minority homebuyers must accept majority decision, noting 99.96% vote share approved the plan with 86 of 140 affected homebuyers voting favorably.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Classification of homebuyers as 'affected' and 'unaffected'.
3. Alleged preferential treatment and backdoor entry of the Successful Resolution Applicant (SRA).
4. Conduct of the Corporate Insolvency Resolution Process (CIRP) by the Resolution Professional (RP).
5. Approval of the Resolution Plan.

Summary:

1. Condonation of Delay:
Interlocutory Application Nos. 4551 and 4554 of 2023 were filed by the Appellant(s) for condonation of delay of 13 and 6 days in filing the Appeal. The delay was condoned as sufficient cause was shown by the Appellant(s). The applications were disposed of accordingly.

2. Classification of Homebuyers:
The Appellant challenged the classification of homebuyers into 'affected' and 'unaffected' categories. The 'affected homebuyers' were those who were allotted units without obtaining a No Objection Certificate (NOC) from LIC Housing Finance Ltd. (LICHFL), while 'unaffected homebuyers' had obtained NOCs. The Tribunal upheld this classification, noting that the allotment made without NOC was void, and fresh allotments were made under the Resolution Plan with reduced areas. The Tribunal referenced its previous judgment, which had already upheld this classification.

3. Alleged Preferential Treatment and Backdoor Entry:
The Appellant argued that the SRA, Kabra Estate and Investment Consultants, was given preferential treatment and allowed a backdoor entry by submitting its Expression of Interest (EOI) after the deadline. The Tribunal found that the CoC had resolved to allow the SRA to submit its EOI and that a fresh Form-G was published, inviting EOIs for a holistic resolution of the Corporate Debtor. The SRA submitted its EOI within the new timeline, and the Tribunal found no breach of regulations.

4. Conduct of CIRP by RP:
The Appellant contended that the RP violated the Insolvency and Bankruptcy Code, 2016, and the CIRP Regulations, claiming material irregularity in the process. The Tribunal rejected these claims, noting that the RP had conducted the CIRP in accordance with the Code and Regulations. The Tribunal also observed that the Appellant had voted in favor of withdrawing the Phase-1 Resolution Plan, which was subsequently rescinded and replaced with a fresh Form-G.

5. Approval of the Resolution Plan:
The Appellant challenged the approval of the Resolution Plan, arguing that the RP did not conduct due diligence u/s 29A. The Tribunal found that an affidavit of compliance with Section 29A was submitted, and the CoC had deliberated and approved the Plan. The Tribunal noted that the Resolution Plan was approved by 99.96% of the CoC's voting shares, including both 'affected' and 'unaffected' homebuyers. The Tribunal emphasized that a minority homebuyer must sail with the majority decision, referencing the Supreme Court's judgment in Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Versus NBCC (India) Ltd. & Ors. The Tribunal found no grounds to interfere with the impugned orders approving the Resolution Plan.

Conclusion:
The Appeals were dismissed, and the Tribunal upheld the impugned orders dated 19.07.2023, approving the Resolution Plan. Each party was ordered to bear its own costs.

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