TaxTMI 
TaxTMI 
2022 (6) TMI 108
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....chnical) And [Naresh Salecha] Member (Technical) For the Appellant : Mr. Mahesh Kumar and Ms. Simran Soni, Advocates For the Respondent : Mr. Abhinav Vasisht, Sr. Advocate with Mr. Rakesh Kumar Bajaj and Mr. Harish Taneja, Advocates for R-1 & 2. Mr. Nitin Kumar and Mr. Gagan Gulati, Advocate for R-3. Mr. Sumesh Dhawan and Ms. Vatsala Kak, Advocates for R-4. JUDGMENT ASHOK BHUSHAN, J. These five Appeal(s) have been filed by Homebuyers of Corporate Debtor - K V Developers Private Limited aggrieved by order of the Adjudicating Authority refusing to entertain their belated claims as Financial Creditors of the Corporate Debtor. 2. In Company Appeal (AT) (Insolvency) No. 390 of 2022 the order dated 11.11.2021 rejecting the I.A. No.5146 of 2021 has been challenged. The Adjudicating Authority while rejecting the I.A. observed that the claim by the Applicant in the matter was filed after delay of eight months from the cut-off date as decided by Resolution Professional. The Resolution Professional having already been put up to voting prior to the filing of claim, the Application was rejected. In Company Appeal (AT) (Insolvency) No. 391 of 2022, order dated 26.10.20....
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....nted as Interim Resolution Professional, who was subsequently confirmed as Resolution Professional. The Resolution Professional published Form-A dated 30.10.2020 inviting claim from creditors on or before 11.11.2020. Publication was also made in two newspapers. (ii) The Appellant(s) who have booked their flats with the Corporate Debtor, could not know about the publication of Form-A and the initiation of Corporate Insolvency Resolution Process ("CIRP"). The Appellant in Company Appeal (AT) (Insolvency) No. 390 of 2022, resides in UK; the Appellant in Company Appeal (AT) (Insolvency) No. 392 of 2022, resides in Jhansi; the Appellant in Company Appeal (AT) (Insolvency) No. 393 of 2022 resides in Chennai, "although he has given address of Noida, which is same as that of attorney of Appellant in Company Appeal (AT) (Insolvency) No. 390 of 2022. The Appellant's husband in Company Appeal (AT) (Insolvency) No. 394 of 2022 resides in Bangalore. Due to Appellant(s) not being residing in Noida, where the office of the Corporate Debtor situated, could not have learnt about Corporate Insolvency Resolution Process ("CIRP") and, hence, could not file their claims within time. (....
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....ave been rejected by the Adjudicating Authority observing that claims having been filed after gap of eight months from the last date of the submission of the claim, they cannot be admitted. Further, CoC has already approved the Resolution Plan. Aggrieved by the orders passed by the Adjudicating Authority, Appellant(s) have come up in this Appeal, 5. We have heard Shri Mahesh Kumar, learned Counsel for the Appellant, Shri Abhinav Vasisht, learned Senior Counsel has appeared for Resolution Professional, Shri Nitin Kumar, learned Counsel appeared for CoC and Shri Sumesh Dhawan, learned Counsel appeared for Successful Resolution Applicant. 6. learned Counsel for the Appellant(s) submits that Appellant(s) are Financial Creditors and even though, they could not file their claims within the time prescribed in Form-A, but details of their allotment and payments made by them already existed in record of the Corporate Debtor. It was the duty of the Resolution Professional to inform the Appellant(s) to file their claims and further the claim of the Appellant(s) qua the Corporate Debtor being matter of record, Resolution Professional could very well included their claims in the Informati....
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....en committed by Resolution Professional in not including the Appellant(s) in the List of Creditors. There was no occasion to include the name of the Appellant(s) in Information Memorandum, since, they have not filed their claim within time. There is no obligation on the Resolution Professional to inform the Homebuyers for filing their claims, apart from making publication in Form-A as required by Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as the "CIRP Regulations"). The law as it exists, does not oblige the Resolution Professional to send any information to Homebuyers. 9. The learned Counsel for the Successful Resolution Applicant also supported the submission of learned Senior Counsel for the Resolution Professional and submitted that claims filed by all the Appellant(s) were beyond the time prescribed for filing the claim. The Resolution Plan was approved by the CoC on 20.07.2021 and except Appellant in Company Appeal (AT) (Insolvency) No. 390 of 2022, all other claims were filed after 20.07.2021. The Appellant(s) having not filed their claim before the prescribed time, their rights ....
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....claims were filed by the Appellant(s) on 14.07.2021, 23.07.2021 and in 09.11.2021. The learned Counsel for the Respondent has placed reliance on a judgment of this Tribunal in Mukul Kumar vs. M/s RPS Infrastructure - Company Appeal (AT) (Insolvency) No. 1050 of 2020, where this Tribunal has held that the Resolution Plan has already been approved by the CoC and pending resolution for approval, new claims cannot be entertained. In paragraph 34 of the judgment, following has been laid down: "34. With the aforesaid, we are of the view that when the Resolution Plan has already been approved by the CoC and it is pending before the Adjudicating Authority for approval, at this stage, if new claims are entertained the CIRP would be jeopardized and the Resolution Process may become more difficult. Keeping in view the object of the IBC which is resolution of Corporate Debtor in time bound manner to maximize the value, if such request of claimant is accepted the purpose of IBC would be defeated. Hon'ble Supreme Court in the case of CoC of Essar Steel India Ltd. (Supra) held as under:- 88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist a....
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....s of society and majority of whom, who book flat has taken loan from Banks and other financial institutions and they are saddled with liability to pay their loan from their hard-earned income they make payment to the Corporate Debtor in hope of getting a possession of the flat for their residence. Non-submission of claim within the time prescribed is a common feature in almost all project of real estate. But as law exists today, they cannot be included in the List of Creditors and that too after approval of Plan by CoC. We, thus, do not find any ground to interfere with order of the Adjudicating Authority rejecting their Application for admission of their claim. However, their claims need to be dealt in a manner, which we shall deal in later part of this judgment. Question No.(2) 16. The submission raised on behalf of Resolution Professional as well as Successful Resolution Applicant is that after approval of the Resolution Plan by CoC on 20.07.2021, the claim of all the Appellant(s) stood extinguished, which submission is refuted by the learned Counsel for the Appellant(s). The question to be answered is as to whether after the approval of the Resolution Plan by the CoC, whi....
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....ellant(s) shall happen only after approval of the Plan by the Adjudicating Authority. The argument of the Respondents that since CoC has approved the Resolution Plan, the claim of the Appellant(s) have been extinguished, cannot be accepted as there is no extinguishment of claim of the Appellant(s) on approval of Plan by the CoC. Question No.(2) is answered accordingly. Question Nos. (3) and (4) Since, both the above questions are interrelated, they are taken up together. 19. We have noticed above that in the event a claim belatedly filed by a Homebuyer is not accepted to be taken up, such Homebuyer cannot be included in the List of Creditors as prepared under CIRP Regulations. The case of Homebuyers has been now recognized as Financial Creditors under the provisions of the Code as amended by Act 26 of 2018 (w.r.e.f 06.06.2018). The amendment in Code was brought to mitigate the misery of Homebuyers and to give them participation in the CIRP of a real estate Company. Looking to the procedure as is prevalent regarding filing of the claim by Financial Creditors, large number of Homebuyers are unable to file their claim within the time due to various genuine reasons related to ....
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....hat have been given in relation to the debts of the corporate debtor by other persons, specifying which of the guarantors is a related party; (g) the names and addresses of the members or partners holding at least one per cent stake in the corporate debtor along with the size of stake; (h) details of all material litigation and an ongoing investigation or proceeding initiated by Government and statutory authorities; (i) the number of workers and employees and liabilities of the corporate debtor towards them; (j) 15[***] (k) 16[***] (l) other information, which the resolution professional deems relevant to the committee." 20. There are two important provisions of Regulation 36. Regulation 36(2)(a) and Regulation 36(2)(l). Regulation 36(2) oblige the Resolution Professional to include the details of Corporate Debtor regarding assets and liabilities. The word "liabilities" is an expensive word. The "liability" has been defined in P Ramanatha Aiyar - Advanced Law Lexicon in following words: "The term 'liability means a liability to pay money or money's worth and it includes "any liability for breach of trust, any liabili....
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.... similarly micro claims relating to Individual, MSME, and other small traders are also not considered by the Resolution Professional because of time constraint, belated receipt or non receipt of the claim even though the same may be provisioned for in the books of Accounts of Corporate Debtor hence in order to strengthen the system including the preparation of information memorandum as per regulation 36 of IBBI, it would be fair and proper if appropriate provision is incorporated under IBBI, (Insolvency Resolution Process for Corporate persons) Regulation 2016 for preparation of Balance Sheet as on date of initiation of CIRP process and the same gets audited from a regular Statutory Auditor of the Corporate Debtor certifying all schedules, including micro details of both Assets and Liabilities so that admitted liabilities in the Corporate Debtor records are not ignored even if such claims are not received in time etc. It will aid & smoothen the existing system of collection and consideration of claim and these small individuals, MSME, SME and Government Department will not be the sufferer. It will also avoid large number of cases being filed by such left out Creditors." 23. We t....
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....e Appellants were noted in paragraph-4 to the following effect: "4. The Appellants have stated that later, in the 8th CoC meeting which took place on 25.09.2019, it was decided to publish the 4th Expression of Interest (EOI) which was published in Jansatta and Financial Express newspapers on 01.10.2019 with last date for submitting EOI on 07.10.2019. It is claimed by the appellants that Maya Buildcon, which had earlier withdrawn its resolution plan, filed CA no. 282/2019 before Adjudicating Authority that it be allowed to submit a revised resolution plan. This application remained pending but the RP allowed a consortium which included Maya Buildcon to submit a resolution plan and place it before the CoC for consideration. A revised plan was subsequently approved by the CoC in e-voting held on 6/7 November 2019. While the resolution plan was pending consideration of the Adjudicating Authority an applicant Vishal Saxena, who could not file his claim in time. obtained order of the Adjudicating Authority in CA No. 12/2020 on 3.2.2020, for admission and consideration of his claim. The appellants have further stated that while Vishal Saxena's claim and other claims that were fil....
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....nt, and hence could not file their claims with Resolution Professional in time. The replies on behalf of Resolution Professional submitted in CA No. 700 of 2021 at page 26, para 30 mentions that, "That it is respectfully submitted, that, the erstwhile resolution professional did not get any cooperation from the Appellant as was statutorily required from him for discharge of duties by the resolution professional during the CIRP of Corporate Debtor, further, the registered office of the Corporate Debtor at Meerut was closed and the only principal place of business at Faridabad as per MCA records -Piyush Global situated at Plot 5, YMCA Chowk, Delhi Mathura Road, Faridabad (HR) which was sealed by the secured financial creditor - HDB Financial Services Limited (HDBFS) under SARFAESI Act, 2002 and Municipal Corporation of Faridabad (MCF) since prior to start of CIRP on 3rd December,2018. Further, all the employees of the Corporate Debtor had left and no employees of the Corporate Debtor were on the rolls of the corporate debtor as on insolvency commencement date on 3rdDecember 2018. All the business operation of the Corporate Debtor was also closed." 28. Thus we see th....
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....laims has not been reflected in the Information Memorandum. There being no detail of claims of the Appellant(s), the Resolution Applicant could not have been taken any consideration of the claim of the Appellant(s), hence, Resolution Plan as submitted by Resolution Applicant cannot be faulted. However, we are of the view that the claim of those Homebuyers, who could not file their claims, but whose claims were reflected in the record of the Corporate Debtor, ought to have been included in the Information Memorandum and Resolution Applicant, ought to have been taken note of the said liabilities and should have appropriately dealt with them in the Resolution Plan. Non-consideration of such claims, which are reflected from the record, leads to inequitable and unfair resolution as is seen in the present case. To mitigate the hardship of the Appellant, we thus, are of the view that ends of justice would be met, if direction is issued to Resolution Professional to submit the details of Homebuyers, whose details are reflected in the records of the Corporate Debtor including their claims, to the Resolution Applicant, on the basis of which Resolution Applicant shall prepare an addendum to t....