TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 614
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....he 'Miscellaneous Applications', filed under Insolvency & Bankruptcy Code, 2016 (in short 'I & B Code, 2016') Brief Facts : 2. 'Innova Homebuyer Neyveli Association' is the 'Appellant' herein, is an Association of the 'Homebuyers'. 'P Dot G Construction Pvt. Ltd.' is the 1st Respondent herein, who is the 'Corporate Debtor' undergoing the 'Corporate Insolvency Resolution Process'. 'Mr. Sundaresan Nagarajan' is the 2nd Respondent herein, who is the 'Resolution Professional' of the 1st Respondent. 'DMI Finance Private Limited' is the 3rd Respondent herein, who is the 'Financial Creditor'. 'RCC e-Construct Private Limited' is the 4th Respondent herein, who is the 'Successful Resolution Applicant' on 13.12.2019. 3. The 'Corporate Insolvency Resolution Process' was initiated against the 1st Respondent - 'M/s P Dot G Constructions Pvt. Ltd. & Anr.' on 13.07.2018 and based on the recommendations of 'Committee of Creditors', the 'Adjudicating Authority' approved the 'Resolution Plan' of 'Successful Resolution Applicant' viz. M/s RCC e-Construction Pvt. Ltd. 4. Aggrieved by above 'Resolution Plan', the appeal before this 'Appellate Tribunal', has been filed. Several issues have been....
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....8% to 36% on principal amount outstanding of the 3rd Respondent and in contrast has awarded, only 8% interest to the 'Homebuyers'. 9. The Learned Counsel for the Appellant stated that the 2nd Respondent in collusion with the 3rd Respondent through wrong forensic audit undermined the value of no dues certificates and consolidated receipts which resulted into denials of claims of the 'Appellant' in the 'Resolution Plan'. The Learned Counsel for the Appellant stated that to add to their injuries, demand for additional payment of 70% to 100% of initial amount was asked for possession of their flats within the period of 60 days from the date of the 'impugned order' with threat to cancel flats otherwise. In contrast, the 'Homebuyers' who entered in the scenario at much later stage were asked to be pay only 15% to 25% of booking amount causing undue discrimination, vis-à-vis members of the association. 10. The Learned Counsel for the Appellant emphasised that the 'Resolution Plan' is illegal and unethical which does not provide even the minimum liquidation value of assets of the 1st Respondent in violation of Section 30(2)(b) of I & B Code, 2016. The Learned Counsel for the Appel....
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....ims. 14. The Learned Counsel for the Appellant concluded his pleadings with a request to set aside the 'impugned order' and give stay on the 'Resolution Plan'. Respondent's Submission:- 15. The Learned Counsel for the Respondents opposed the admission of the appeal, which according to them devoid of any merit and need to be dismissed with costs. The Learned Counsel for the Respondents submitted that the 'impugned order' has been passed after factoring into account all the facts and relevant laws on the subject. The Learned Counsel for the Respondents also pointed out that while approving the 'Resolution Plan', all applicable regulations and procedures were fully met with and since then the 4th Respondent has already started implementation of the 'Resolution Plan' and any interference or order affecting the 'Respondents' will adversely affect revival of the 'Corporate Debtor'. 16. The Learned Counsel for the Respondent No. 1 submitted that the 'Counter Affidavit' filed by the 2nd Respondent in the present appeal is being endorsed by the 1st Respondent in toto. The Learned Counsel for the Respondent No. 1 requested this 'Appellate Tribunal' to reject and dismiss the appeal. 17. ....
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....Debtor'). 21. The Learned Counsel for the Respondent No. 3 also supported reply submitted by the Learned Counsel for the Respondent No. 2 regarding denial of the unauthorised and unproved claims of the 'Appellant'. The Learned Counsel for the Respondent No. 3 refuted the allegations and stated that the so-called 'No Dues Certificates' were not accompanied with official receipt, registered sale deed in favour of the 'Appellant' and the same could not be identified in the Tally Books of the 'Corporate Debtor' as such the 2nd Respondent rightly rejected wrong claims. The Learned Counsel for the Respondent No. 3 stated that in any case majority of the 'Homebuyers' were actively participating in the 'Committee of Creditors' who voted in favour of the 'Resolution Plan' and it is only few 'Homebuyers' who are raising this issue as after thought to derail the whole process of revival. 22. The Learned Counsel for the Respondent No. 3 further denied of the 'Appellant' allegation regarding scope and outcome of the forensic audit. The Learned Counsel for the Respondent No. 3 clarified that scope was discussed and approved in 'Committee of Creditors' and outcomes as drawn was conducted by a p....
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....solution Plan' based on 'No Dues Certificates' and cash payments made by them to the 1st Respondent as sale consideration. (b) Whether the percentage recovery available to members of the association lower than 'Financial Creditor' is permissible. (c) Whether approved 'Resolution Plan' can provide for differential treatments to the different class of 'Homebuyers' by way of charging different premium rates. (II) Whether the amount under the 'Resolution Plan' can be less than the 'Liquidation Value' ? (III) Whether the 4th Respondent who is 'Successful Resolution Applicant' is close associate of 3rd Respondent who is 'Financial Creditor' of the 1st Respondent (Corporate Debtor) and whether the 4th Respondent as such can be barred by I &B Code, 2016 for submission of the 'Resolution Plan'. 29. Issue No. (I) (a) Whether there was an error in refusal to admit claims of the 'Homebuyers' members of the Appellant's Association while dealing with the 'Resolution Plan' based on 'No Dues Certificates' and cash payments made by them to the 1st Respondent as sale consideration. (b) Whether the percentage recovery available to members of the association lower than 'Financial Creditor' is pe....
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....which the adjudicating authority can reject the resolution plan is in reference to matters specified in Section 30(2), when the resolution plan does not conform to the stated requirements. Reverting to Section 30(2), the enquiry to be done is in respect of whether the resolution plan provides: (i) the payment of insolvency resolution process costs in a specified manner in priority to the repayment of other debts of the corporate debtor, (ii) the repayment of the debts of operational creditors in prescribed manner, (iii) the management of the affairs of the corporate debtor, (iv) the implementation and supervision of the resolution plan, (v) does not contravene any of the provisions of the law for the time being in force, (vi) conforms to such other requirements as may be specified by the Board. The Board referred to is established under Section 188 of the I&B Code. The powers and functions of the Board have been delineated in Section 196 of the I&B Code. None of the specified functions of the Board, directly or indirectly, pertain to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution p....
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....unal' that the 'Resolution Plan' was approved by overwhelming majority and 81% of the members of the 'Committee of Creditors' approved the 'Resolution Plan' including the majority 'Homebuyers' and that the 'Homebuyers' constitute majority of the 'Committee of Creditors' voting shares with 53.26% of the total voting shares whereas the 3rd Respondent i.e. 'Financial Creditor' is having only 37.68% voting shares and remaining 8% voting shares are being held by other 'Financial Creditors' along with the 3rd Respondent, majority of 'Homebuyers' represented in the 'Committee of Creditors' voted in favour of the 'Resolution Plan'. This clearly denotes that the 'Resolution Plan' was equitable and fair to all with the sole objective for revival of the 'Corporate Debtor' and handing over the flats to the 'Homebuyers'. * In the appeal before this 'Appellate Tribunal', it has been brought and the 'Resolution Plan' was approved by the 'Committee of Creditors' including majority of the votes from 'Homebuyers' in favor of approval of the 'Resolution Plan'. The contention of the 'Appellant' with regards to equitable treatment with the financial creditor and not being treated at par with them doe....
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....editors' including, majority of the of the 'Homebuyers'. All apartments forming part of pending projects of the 'Corporate Debtor' had been included and made part of the information memorandum, which was approved by the 'Committee of Creditors'. * As regard, the contention of the 'Appellant' with regards to the 'Resolution Plan' value being lower than 'Liquidation Value', no fault can be found in view of judgment of the apex court in the case of Maharashtra Seamless Ltd Vs Padmanabhan Venkatesh & Ors. (Supra) and therefore the 'Adjudicating Authority' rightly held that the resolution plan amount need not match the Liquidation value. 31. Issue No. (III) Whether the 4th Respondent who is 'Successful Resolution Applicant' is close associate of 3rd Respondent who is 'Financial Creditor' of the 1st Respondent (Corporate Debtor) and whether the 4th Respondent as such can be barred by I &B Code, 2016 for submission of the 'Resolution Plan'. * The 'Appellant' has contended that there has been collusion between the 4th Respondent as 'Successful Resolution Applicant' and the 3rd Respondent DMI Finance (P) Limited as the 'Financial Creditor' of the 1st Respondent ('Corporate Debtor'). Ho....