TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 261
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....unal, Principal Bench New Delhi) in I.A. 2201(PB)/2020, I.A. 1166(PB)/2019, I.A. 1802(PB)/2020 in CP No. (IB)-272(PB)/2019. I.A. 2201 (PB)/2020 filed under Section 30(6) of the Insolvency and Bankruptcy Code, 2016, (hereinafter referred to as 'the Code') filed by the Resolution Professional before the Adjudicating Authority, seeking approval of the Resolution Plan, under Section 31 of the Code r/w Regulation 39 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Adjudicating Authority approved their Resolution Plan submitted by the Successful Resolution Applicant/M/s. Gautam Builders in consortium with M/s. Rapid Contracts Private Limited. 2. Facts in brief are that Section 7 Application for initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. JNC Construction Private Limited/the 'Corporate Debtor' was admitted by the Adjudicating Authority on 30/05/2019 and Mr. Ajay Kumar Jain was appointed as IRP. As per Regulation 27 of the CIRP Regulations, 2016, the Resolution Professional (RP) appointed registered valuers for valuation of the Security/Financial Assets of the 'Corporate Debtor' and f....
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....Plan. The Resolution Professional has confirmed in the compliance certificate given in Form H that the Resolution Plan provides for the management and control of the business of the corporate debtor." 3. Submissions of the Appellant: Learned Counsel appearing for the Appellant/'Uttar Pradesh Awas Evam Vikash Parishad, (UP Housing and Development Board)' strenuously contended that the Adjudicating Authority has erroneously approved the Resolution Plan without considering the issue whether a property not belonging to the 'Corporate Debtor' can be treated as part of the property for preparation of Resolution Plan in violation of Sections 18(f) & (g) of the Code and whether such property which belongs to the Appellant and governed by the Uttar Pradesh Housing and Development Board can be construed to be the property of 'Corporate Debtor', especially in the light of the fact that there is Higher Purchase Agreement executed between Appellant and 'Corporate Debtor' on 14/12/2009 and the 'Corporate Debtor' had defaulted the payments. There was no service of Notice on the Appellant regarding the CoC Meeting and the Resolution Plan copy was not supplied to the Appellant adversely affect....
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....1, against which the Resolution Plan provides for more than Rs. 12Crs./-. The Appellant pursued their remedy before the District Magistrate Ghaziabad to initiate proceedings against the 'Corporate Debtor' vide representation dated 16/02/2019. Even after submitting their 'Claim' which was admitted by the erstwhile IRP, the Appellant continued to pursue their remedies before the District Magistrate and got the said property attached and initiated the recovery proceedings against the 'Corporate Debtor' being fully aware of the moratorium imposed under Section 14 of the Code. RP had to approach the Adjudicating Authority seeking de-sealing of the said property, which relief was granted by the Adjudicating Authority vide Order dated 11/03/2020. The Appellant admitted to exercising multiple remedies despite imposition of the moratorium and in complete disregard of the CIRP Process. RP was constrained to file IA 3688/PB/2020, seeking compliance of the Order dated 11/03/2020 wherein the Appellant has also been made a party. 12 CoC Meetings were held and 4 Resolution Plans were received and after due deliberation and balancing the interest of all stakeholders, the Resolution Plan ....
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....justified in approving the Resolution Plan keeping in view the requirements of Section 30(2) of the Code. ii. whether the Appellant herein was unfairly dealt with regarding the settlement of its 'Claim', under the subject Resolution Plan. 7. At the outset, we address to the contention of the Learned Counsel for the Appellant that the said property does not belong to the 'Corporate Debtor' and therefore could not have been included in the pool of assets. A brief perusal of the record shows that the Appellant had issued an Allotment Letter No. 1206 dated 11/04/2008 in favour of the 'Corporate Debtor' and subsequently another Allotment Letter No. 2974 dated 02/12/2009 with respect to the subject plot. Thereafter a Higher Purchase Agreement dated 14/12/2009 was also entered into between the parties creating an interest of the 'Corporate Debtor' in the said plot. Clause 10 of the Higher Purchase Agreement, relied upon by the Appellant, pertains to selling, transferring, assigning of the plot by the 'Corporate Debtor' in favour of a third party. Sl. No. Date Event 1. 11.04.2008 Allotment Letter issued by the Appellant in favor of the Corporate Debtor for lease of Rs. 9051/- per ....
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....e, Ghaziabad to not sell the land in view of the moratorium. 17. 20.12.2019 NCLT directed the RP to file an affidavit regarding the project of the Corporate Debtor. 18. 11.03.2020 NCLT directed de-sealing of the Project Land. 19. 04.08.2020 Impugned Order approving the Resolution Plan. The aforenoted table shows that there were instalments which were due but the Appellant did not cancel the Agreement and the right of revocation needs to be exercised by following due process of law which has admittedly not taken place prior to the Insolvency commencement date. All the dues can be adequately dealt with under the provisions of the Code. Having regard to the fact that the land in question was allotted to the highest Bidder, the 'Corporate Debtor' herein for Development of Group Housing Project, and having executed a Higher Purchase Agreement dated 14/12/2009 by virtue of which, a right of possession was created in favour of the 'Corporate Debtor', now the stand of the Appellant that the 'Corporate Debtor' does not have any right on the land, cannot be sustained. The rights created under the Higher Purchase Agreement cannot be extinguished without following due process of law.....
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....al that too against an order "approving a resolution plan" under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers "by the resolution professional" during the corporate insolvency resolution period. Third, the debts owed to operational creditors have not been provided for in the resolution plan in the prescribed manner. Fourth, the insolvency resolution plan costs have not been provided for repayment in priority to all other debts. Fifth, the resolution plan does not comply with any other criteria specified by the Board. Significantly, the matters or grounds- be it under Section 30(2) or under Section 61(3) of the I&B Code -are regarding testing the validity of the "approved" resolution plan by CoC; and not for approving the resolution plan which has been disapproved or deemed to have been rejected by CoC in exercise of its business decision." [emphasis supplied] 12. The Hon'ble Supreme Court in 'Ghanashyam Mishra and Sons Private Limited' Vs. 'Edelweiss Asset Reconstruction Company Limited Through the Director & Ors.', (2021) 166 SC....
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....ount within 30 days, the order of approval of the 'resolution plan' was to be treated to be set aside. While allowing the appeal and setting aside the directions of NCLAT, this Court observed thus: "30. The appellate authority has, in our opinion, proceeded on equitable perception rather than commercial wisdom. On the face of it, release of assets at a value 20% below its liquidation value arrived at by the valuers seems inequitable. Here, we feel the Court ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution plan on the basis of quantitative analysis. Such is the scheme of the Code. Section 31(1) of the Code lays down in clear terms that for final approval of a resolution plan, the adjudicating authority has to be satisfied that the requirement of subsection (2) of Section 30 of the Code has been complied with. The proviso to Section 31(1) of the Code stipulates the other point on which an adjudicating authority has to be satisfied. That factor is that the resolution plan has provisions for its implementation. The scope of interference by the adjudicating authority in limited judicial review has been laid down in Essar Steel [Essar S....