TaxTMI 
TaxTMI 
2022 (9) TMI 1289
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.... entire Consolidated CIRP of the Corporate Debtors is in violation of the provisions of the IB Code 2016 and the rules and regulations framed therein and accordingly be pleased to not approve the same and the Plan alongwith its addendums should be sent back to the committee of creditors for its re-consideration; b. That this Hon'ble Tribunal be pleased not to approve the Resolution Plan submitted by Respondent No. 4 Resolution Applicant under Section 31 of the IB Code 2016 and the rules and regulations framed thereunder and should be sent back to the committee of creditors; c. Pending the hearing and final disposal of the present Application the effect, implementation and operation of the Resolution Plan alongwith its addendums kindly be stayed; 2. The Corporate Debtor was admitted into CIRP on 30th August 2018 under an Application filed by Raj Infrastructure Development (India) Private Ltd. filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter called "the Code") and the Respondent No. 1 was appointed as the Resolution Professional (RP). Thereafter, the CIRP of the present Corporate Debtor was consolidated with four of their wholly-owned subsidiarie....
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....y built structures, the completion of which would require a substantial amount of expense to be made in due course. This cost is undefined and the Homebuyers are unaware of the actual contribution to such miscellaneous costs, if any. d. Fourthly, the Applicants impute that the Plan does not provide for an event of default on the part of the RA to implement the Plan and does not make any provision to safeguard the rights of the Homebuyers in case the RA fails to construct and deliver possession as promised under the Plan. The Applicants submit that they rely on Section 18 of the RERA Act to maintain a claim for delayed possession but the Plan overreaches this right and provides for extinguishment of future contingent liabilities. e. Fifthly, the Applicants argue that the RA has not laid down the projected cash flow, balance sheet and profit and loss account of the Corporate Debtor despite which the CoC voted on the Plan without evaluating its feasibility and viability. This gives rise to considerable apprehension in the minds of the Applicants as the Plan envisages contribution from the Homebuyers towards actual cost of construction without informing individual Homebuyers of t....
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....s before voting on the Resolution Plan. The RP relies on Committee of Creditors of Essar Steel Limited vs. Satish Kumar Gupta (2020) 8 SCC 531 to contend that this will not only negate the objective of the Code but also incentivise Creditors to dissent while approving the Plan and eventually may push the Corporate Debtor into Liquidation. If every creditor uses the liquidation value as the basis for voting, it might result into a situation where each creditor seeks to secure the highest value for themselves and opting for Liquidation even if the collective value obtained by the Corporate Debtor is better in case of Resolution. c. The RP submits that the Liquidation value of the Corporate Debtor was duly calculated by Registered Valuers who provided an estimate of the fair value and liquidation value in terms of Regulation 35 of the CIRP Regulations. Hence the liquidation value is not notional and in fact, the Plan was approved by the CoC after considering this liquidation value along with the viability of the Plan. d. The RP submits that Homebuyers constitute a separate class of creditors and they may be afforded a treatment that is different from other Financial Creditors in....
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....brought to the notice of the RP by these Homebuyers. With the above submissions, the Respondent No. 1 prays for rejection of the present Application. FINDINGS 5. We have heard the submissions of the Counsel appearing for the Applicants and the Counsel appearing for the RP at great length. On examining the present Application, three primary issues come to the fore. Firstly, whether liquidation value is required to be provided to every individual Home buyer under Section 30(2)(b)(ii) in the capacity of a dissenting Financial Creditor. In order to deal with the question that fell for consideration, it is pertinent to note that Homebuyers, essentially, constitute a different class of creditors distinct from the other Financial creditors. Individual Homebuyers may have divergent views but ultimately, they vote as a class and individuals therein cannot claim to be 'dissenting financial creditors' if they vote against the Resolution Plan. This is elaborated in Jaypee Kensington (supra) as follows: "163....we are clearly of the view that the propositions of some of the associations and individual homebuyers to claim themselves as 'dissenting homebuyers' and thereby, 'dissenting fina....
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.... majority votes of the Homebuyers and since he did not change his vote after receiving the communication regarding extension of the voting lines, it is deemed that the AR voted according to the instructions he received from the Homebuyers he represents. Therefore, in our view, this is a belated stage for the Homebuyers to raise allegations against the AR especially after the CoC has voted in favour of the Resolution Plan with an overwhelming majority of 96.14% voting share. Moreover, the AR has already voted in favour of the Plan and a change in this decision would not influence the results in a substantial manner given that the Homebuyers hold 7.45% voting share in the CoC. 8. Additionally, it was contended by the Applicants that when the Plan was put to vote before the Homebuyers, only 230 out of 1086 Homebuyers voted and out of which only 144 Homebuyers voted for the Plan which constitutes hardly 10% of the total number of Homebuyers, hence the requisite 50% majority mark was not achieved as claimed by the RP. To put rest to this argument, a bare reading of sub-section (3A) of Section 25A would suffice: "(3A) Notwithstanding anything to the contrary contained in sub-section (....