2019 (8) TMI 41

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....n Professional Mr. Mohit Singh and Ms. Mitakshara Goyal, Advocates for Jaypee Green Krescent 'Home Buyers Welfare Association'. Mr. Ronvijay Gohain, Advocate for NBCC India Ltd. Mr. M.L. Lahoty, Mr. Amit K. Mishra, Mr. Shivam Pandey and Mr. Anchit Sripat, Advocates for Home Buyer Mr. Hemant Kumar Singh, Advocate for Home Buyer Mr. Anupam Lal Das, Sr. Advocate with Mr. Vishal Gupta, Mr. Sumeet Sharma and Mr. Divyanshu Gupta, Advocates for Jaiprakash Associates Ltd. JUDGMENT As both the appeals relate to 'Corporate Insolvency Resolution Process' against 'Jaypee Infratech Limited' (Corporate Debtor) they were heard together and disposed of by this common order. 2. The relevant facts of the case are as follows. The 'Corporate Insolvency Resolution Process' was initiated against 'Jaypee Infratech Limited' pursuant to an application under Section 7 of the 'Insolvency and Bankruptcy Code, 2016 (for short, 'the I&B Code') filed by the 'IDBI Bank Limited' which was admitted with respect to same 'Corporate Debtor'. One 'Chitra Sharma' moved before the Hon'ble Supreme Court, in 'Chita Sharma Vs. Union of India' wherein the Hon'ble Supreme Court by its judgement repo....

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....s Association and other by eight Financial Creditors, all of them being the members of the Committee of Creditors (CoC) is whether the various threshold voting share fixed for the decision of the CoC under various sections of the I & B Code needs to be followed literally or whether they are directory, and if so, what procedure has to be followed in determining the voting percentage among the CoC to pass a particular resolution. Decision of Hon'ble Member (Judicial) ii. Therefore, in order to advance the object of I& B Code and the Amendment Act 2 of 2018 and with a view to safeguard the interests of all classes of creditors and all stakeholders, I am of the considered view, "That in case where the CoC comprise Real Estate Class of creditors upto 50% of voting share or more than when there is a dead lock in passing the resolutions, the highest number of voting share in favour of the resolution has to be taken into consideration without looking into the threshold limit provided under various provisions of the I&B Code, except for the purpose of withdrawal of the petition, the approval of the resolution plan, and liquidation i.e under Section 12A, 30(4) and 33(2) res....

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.... the will and vote of the entire class in the COC cannot be accepted;" 6. The aforesaid order dated 24th May, 2019 is under challenge in 'Company Appeal (AT )(Insolvency) No. 708 of 2019' preferred by 'Jaypee Green Krescent House Buyers Welfare Associations & Ors.' 7. In the meantime, the 'Resolution Professional, filed an application in 'C.A. No. 115 of 2019' in 'CP No. (I&B) 77/ALD/ 2017' for seeking exclusion of the period of pendency of the application for clarification for counting the total period of 270 days of 'Corporate Insolvency Resolution Process', i.e. the period during which the matter remained pending for adjudication as to how voting share of the Allottees (Financial Creditors) will be counted. 8. The Adjudicating Authority (National Company Law Tribunal) Allahabad Bench by impugned order dated 6th May, 2019 asked the authorised representative of the Allottees and other learned counsel appearing on behalf of the Allottees to file respective replies with the following observation : "It is further brought to our notice that the third Member of Single Bench of the NCLT is considering the issue of the voting threshold of Financial Creditors including (....

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....onnected case - 'Company Appeal (AT)(Insolvency) No. 708 of 2019' this Appellate Tribunal on 12th July, 2019 observed that projects are temporary in nature as the asset of the 'Corporate Debtor' i.e. infrastructure stands transferred after sale/ allotment to the Allottees. It was also observed that phrase of "hair-cut" as normally used by the learned counsel cannot apply to Allottees for getting their flats and shops. 14. In such peculiar circumstances, this Appellate Tribunal observed that the 'Committee of Creditors' while considering the viability and feasibility of the 'resolution plan' may not reject plans only on the ground of insufficient upfront payment, if the plan is otherwise viable and feasible and in the interest of the Allottees. However, the issue has been left open for decision in an appropriate case, as the only argument is advanced with prayers to exclude the period aforesaid. 15. All the parties, including the 8 Associations of Allottees having more than 5000 Members, 'Resolution Professional', members of the 'Committee of Creditors' requested to exclude the period, when the matter remained pending for decision before the Adjudicating Authority to decide th....

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....al to 'exclude certain period' for the purpose of counting the total period of 270 days, if the facts and circumstances justify exclusion, in unforeseen circumstances. 10. For example, for following good grounds and unforeseen circumstances, the intervening period can be excluded for counting of the total period of 270 days of resolution process:- (i) If the corporate insolvency resolution process is stayed by 'a court of law or the Adjudicating Authority or the Appellate Tribunal or the Hon'ble Supreme Court. (ii) If no 'Resolution Professional' is functioning for one or other reason during the corporate insolvency resolution process, such as removal. (iii) The period between the date of order of admission/moratorium is passed and the actual date on which the 'Resolution Professional' takes charge for completing the corporate insolvency resolution process. (iv) On hearing a case, if order is reserved by the Adjudicating Authority or the Appellate Tribunal or the Hon'ble Supreme Court and finally pass order enabling the 'Resolution Professional' to complete the corporate insolvency resolution process. (v) If the corporate insolv....

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....luded for the purpose of counting the 270 days. However, as the matter is pending since long, we are not inclined to exclude the total period of 260 days and instead in the interest of the Allottees, we exclude 90 days for the purpose of counting the period of 270 days of 'Corporate Insolvency Resolution Process', which should be counted from the date of receipt of the copy of this order. 23. The aforesaid period is excluded to enable the 'Resolution Professional'/'Committee of Creditors' to call for fresh 'resolution plans' and to consider them, if so required after negotiations pass appropriate order under sub-section (5) of Section 30 of the I&B Code preferably within a period of 45 days. Rest of the period of 45 days margin is given to remove any difficulty and appropriate order as may be passed by the Adjudicating Authority. The voting share of the allottees should be counted in terms of 'I & B Code' as existing on the date of voting/'Regulation' and/or in accordance with majority decision of the Adjudicating Authority. 24. It is made clear that all the earlier 'resolution plan(s)' including the plan submitted by the 'NBCC', cannot be considered, having been rejected ....