Resolution applicant eligibility demands strict disclosure of project experience and committed funds at submission, with unsupported claims rejected.
Eligibility criteria for a resolution applicant must be satisfied on the basis of disclosures and supporting documents filed at the time of submission. Claimed project experience could not include the Luv Nest project because it was not disclosed as a consortium member's project, and the asserted Urban Woods experience was unsupported by completion or occupancy certificates. The consortium also failed to prove Rs. 20 crore committed funds, as the bank communication was only a conditional commitment and not evidence of available deployable funds. On these facts, the rejection of the resolution plan was treated as justified for non-compliance with both eligibility requirements.
Issues: (i) Whether the consortium could count the Luv Nest project while claiming experience of delivery of at least 10 lakh sq. ft. super area under the eligibility criteria; (ii) Whether the consortium satisfied the requirement of Rs. 20 crore committed funds under the eligibility criteria.
Issue (i): Whether the consortium could count the Luv Nest project while claiming experience of delivery of at least 10 lakh sq. ft. super area under the eligibility criteria.
Analysis: The eligibility conditions required the prospective resolution applicant to disclose the profile of the consortium members and to substantiate delivery experience with certified completion or occupancy certificates. The Luv Nest project was not shown as a project of either consortium member in the disclosed consortium details, and the threshold was to be judged on the basis of the disclosures made at the time of submission of the expression of interest and resolution plan. The claim of deemed completion for the Urban Woods project was also not accepted, as the record from the local development authority showed that completion or occupancy certificates had not been issued. The materials relied upon did not establish that the claimed project experience met the stipulated standard.
Conclusion: The consortium was not entitled to count the Luv Nest project for satisfying the delivery-experience criterion, and the finding that it failed to meet the 10 lakh sq. ft. requirement was upheld.
Issue (ii): Whether the consortium satisfied the requirement of Rs. 20 crore committed funds under the eligibility criteria.
Analysis: The eligibility condition required proof of committed funds available for deployment, along with the expression of interest. The HDFC communication relied upon by the consortium was only a conditional commitment and not a sanction or proof of available deployable funds. The subsequent clarification from the bank also stated that the document was neither a sanction letter nor evidence of disbursal. On the language of the eligibility condition, the consortium had to demonstrate fund availability, and the material produced did not meet that standard.
Conclusion: The consortium did not satisfy the Rs. 20 crore committed-funds criterion, and the adverse finding on this issue was sustained.
Final Conclusion: The impugned rejection of the resolution plan was found to be justified on both eligibility requirements, and the appeals were liable to fail.
Ratio Decidendi: A resolution applicant must strictly satisfy the disclosed eligibility criteria at the time of submission, and a plan based on inaccurate disclosures or unsupported claims of experience and fund availability cannot be protected by commercial wisdom of the Committee of Creditors.
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AI Drafter ✕
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