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TaxTMI 
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2024 (7) TMI 692
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.... Authority') in I.A. No. 114 of 2023 in C.P No. (IB)- 708/ND/ 2021, whereby the Adjudicating Authority dismissed the application filed by the Appellant under 60(5) r/w Section 18(b) of the Code r/w Regulation 13 of the IBBI (Insolvency Resolution Process for the Corporate Person) Regulation, 2016. 2. Mr. Mohit Goyal is the Resolution Professional of the Aadi Best Consortium Private Limited (in short 'Corporate Debtor') and Skael Enterprises Private Limited is the Respondent No. 2 who is the Successful Resolution Applicant of the Corporate Debtor. 3. The background of the case is that the Mr. Yogesh Gupta, Sole Proprietor of Rapid Constructions filed an application under section 9 of the Code before the Adjudicating Authority which was admitted vide order dated 31.03.2022 and Corporate Insolvency Resolution Process (in short 'CIRP') commenced with appointment of Mr. Mohit Goyal as the Interim Resolution Professional (in short 'IRP') who was later confirmed as Resolution Professional (in short 'RP'). 4. The IRP/RP issued a public announcement inviting claims from various creditors within the last date for submission of claims i.e., 15.04.2022. In 8th Committee of Creditors (in sho....
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....esirable to look into the various categories mentioned in the approved Resolution Plan. The Impugned Order captures such details contained in the Resolution Plan which read as under :- 9. It is the case of the Appellant that he has been categorised under category 4 i.e., "Cancelled Units (not having valid BBA)", whereas he should have been categorised under the category 2 i.e., "Whose Possession of Flats to Flat Owners is pending as on CIRP date". It is the case of the Appellant that this is based on Memorandum of Understanding (in short 'MOU') dated 24.05.2016. The Appellant submitted that the Impugned Order is perverse in not treating the MOU at par with BBA and approving the Resolution Plan treating him in category 4 instead of category 2 of the Resolution Plan. 10. It is the case of the Appellant that the Appellant is a registered company under Companies Act, 1956 and submitted that in the year 2014 the Corporate Debtor approached the Appellant with the proposal to sale commercial area/ shops/ units in the commercial project being developed in Plot No. RC 1/2, Vaishali - 1, Ghaziabad, Uttar Pradesh (in short 'Project'). The Appellant submitted that after several round o....
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....8 of the Resolution Plan." 16. The Appellant pleaded that since the MOU dated 24.05.2016 is at par with BBA, he should have been classified and put in category 2nd instead of category 4th which is for allottees not having valid BBA. The Appellant pleaded that instead of getting 40% of his claims, due to the Impugned Order, he shall be getting only 5% of his claims. 17. The Appellant submitted that vide e-mail dated 19.08.2023 to the Respondent No. 1 the Appellant protested for inclusion of his name in category 4 and requested Respondent No. 1 for several information followed by few reminders, e-mails and finally he got reply from the Respondent No. 1 vide e- mail dated 13.09.2023 and relevant portion reads as under :- In relation with your email dated 29th August, 2023, we would like to apprise you that we are unable to understand your queries as you have not mentioned the specific unit numbers of the shops in the commercial area. Please clarify the unit numbers of the shops as referred in your previous email. Further, The Resolution Applicant has put you in the fourth category. We cannot force or compel the respective applicant to change your category. 18. Aggrieved by the ....
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....d have examined the intent of the documents based on various clauses. 25. Concluding his remarks, the Appellant requested this Appellate Tribunal to allow his appeal and set aside the Impugned Order. 26. Per-contra, both the Respondents denied all the averments of the Appellant treating these as misleading, mischievous and without any merit. 27. The Respondent No. 1 gave the background of the case and drew attention towards relevant dates of the case. 28. The Respondent No. 1 submitted that the Appellant has no locus challenging the Resolution Plan approved by the CoC as the Appellant is an individual member of Financial Creditor in a class who challenged the appeal of the Resolution Plan in I.A. No. 114 of 2023 which is impermissible as held in the judgement of Hon'ble Supreme Court of India in the matter of Jaypee Kensington Vs. NBCC [(2022) 1 SCC 401]. 29. The Respondent No. 1 also refuted the plea of the Appellant that the Respondent No. 1 accepted the claims of the Appellant as the Financial Creditor in class and therefore, there cannot be any different categorisation of such homebuyers. In this connection, the Respondent No. 1 cited one judgment passed by this Appellate ....
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....The Respondent No. 2 also brought out that the Hon'ble Supreme Court in "Committee of Creditors of Essar Steel India Limited Through Authorised Signatory vs. Satish Kumar Gupta & Ors., [(2020) 8 SCC 531]" has laid down that there can be difference in payment of the different category of creditors. 37. The Respondent No. 2 submitted that the commercial wisdom of Committee of Creditors which approved the Resolution Plan cannot be challenged. 38. The Respondent No. 2 elaborated the details of various categories of homebuyers and justified that based on clear description, the Appellant has been correctly placed in category 4 and submitted that the Appellant could not produce any valid homebuyers agreement not could indicate specific units allotted to him by the Corporate Debtor. The Respondent No. 2 submitted that admittedly even the Appellant has agreed that no particular units were ever allotted to the Appellant and only area was mentioned without any description of the property or the apartments and as such the Appellant at best can be classified under category 4 that cancel units not having valid BBA. 39. Concluding his arguments, the Respondent No. 2 submitted that the Reso....
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.... judgment as reads as under :- " ..the real estate developer can also point out that the insolvency resolution process under the Code has been invoked fraudulently, with malicious intent, or for any purpose other than the resolution of insolvency. This the real estate developer may do by pointing out, for example, that the allottee who has knocked at the doors of the NCLT is a speculative investor and not a person who is genuinely interested in purchasing a flat/apartment. They can also point out that in a real estate market which is falling, the allottee does not, in fact, want to go ahead with its obligation to take possession of the flat/apartment under RERA, but wants to jump ship and really get back, by way of this coercive measure, monies already paid by it. Given the above, it is clear that it is very difficult to accede to the Petitioners' contention that a wholly one-sided and futile hearing will take place before the NCLT by trigger-happy allottees who would be able to ignite the process of removal of the management of the real estate project and/or lead the corporate debtor to its death..." (Emphasis Supplied) 43. From the definition of the Code of Homebuyers as ....
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....sumption or the Homebuyers or unit purchaser who purchase the multiple units for commercial purposes. 49. The Hon'ble Supreme Court of India in Pioneer Urban Land (Supra) held that the allottee, who has given advance or paid money to the Real Estate Developers is a Financial Creditor. We find that the issue regarding the genuine Homebuyers v/s Speculative Homebuyers is relevant only at the stage for the admission of CIRP under Section 7 of the Code and in this connection we will reiterate that the Hon'ble Supreme Court of India narrating as under :- "...the real estate developer can also point out that the insolvency resolution process under the Code has been invoked fraudulently, with malicious intent, or for any purpose other than the resolution of insolvency. This the real estate developer may do by pointing out, for example that the allottee who has knocked at the doors of the NCLT is a speculative investor and not a person who is genuinely interested in purchasing a flat/apartment. (Emphasis Supplied) Thus, it becomes clear that the Hon'ble Supreme Court of India held the position of speculative investors only for seeking unnecessary insolvency of the Corporate Debtor. Th....
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....nt agreed to purchase 25,000 sq. ft. area in the project. We note that no units were specified in the said MOU. The other salient feature of the MOU includes the consideration of Rs. 12.50 Crores for 25,000 sq. ft. area and further note that Rs. 10 Crores has already been paid by the Appellant. The MOU also mentioned that the Corporate Debtor shall arrange rent of the said area on behalf of the Appellant and the Corporate Debtor will ensure of rent of Rs. 15 Lakhs per month for the said area. MOU further provide that till such time 25,000 sq. ft. area is leased out, the Corporate Debtor shall pay an interest @ 18% per annum on the amount paid by the Appellant. MOU also provides the rights to the Appellant to terminate the MOU in case possession of the said area is not handed over to the Appellant by the date of possession and the amount would be refunded by the Corporate Debtor along with the interest @ 18% per annum. Rest of the Clauses are standard legal clauses including representative, confidentiality, indemnification, waiver, notice, tax, dispute resolution, applicable laws, specific performance, etc., 56. The relevant clauses of MOU which give more details and the intention....
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....distinguished unit. In contrast, in the present MOU there is no such details made available and only area of 25,000 sq. ft. @ 5000 per sq. i.e., Rs. 12.50 Crores is mentioned. 60. It is interesting to note that there is clause for rental of the properties by the Corporate Debtor @ 15 Lakhs per month failing which interest payment on the amount paid by the Corporate Debtor @ 18% per annum to the Appellant. Such clauses are not normal clauses in BBA or agreement of sale. 61. Normally and generally speaking, the typical BBA do not mention such financial rate of return or interest portion to be paid by the Corporate Debtor to allottee. Even assuming that mention of rent and payment of interest in absence of finding suitable lease out of properties will not make the agreement to sale void or illegal, the other elements to establish that there were specific units sold to the Appellant are absent in the MOU. 62. The Appellant is also aggrieved by the fact that there are different categories of homebuyers who have been given different treatment in the approved Resolution Plan of Respondent No. 2. Although the Appellant submitted during pleadings that he is not challenging the approval o....
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....mebuyers as a class have also voted in favour of the Resolution Plan and thus any single homebuyer cannot be allowed to challenge the same. We will also refer to the judgement passed by Hon'ble Supreme Court of India in case of Essar Steel India (Supra). The relevant portion of the said judgment is read as under :- "88. By reading paragraph 77 (of Swiss Ribbons) dehors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Paragraph 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyond any doubt that equitable treatment is only of similarly situated creditors. This being so, the observation in paragraph 77 cannot be read to mean that financial and operational creditors must be paid the same amounts in any resolution plan before it can pass muster. On the contrary, paragraph 77 itself makes it clear that there is a difference in payment of the debts of financial and operational creditors, operational creditors having to receive a minimum payment, being not less than liquidation value, which does not apply to financial creditors. The amended Regulation 38 set out in paragraph 77 again does not lead to the conclusion that financial and....
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....to the vote cast by the authorised representative over the resolution plan in accordance with the majority decision of the class he is authorised to represent, a Plan of Resolution involving large number of parties (like an excessively large number of homebuyers herein) may never fructify and the only result would be liquidation, which is not the prime target of the Code. In the larger benefit and for common good, the democratic principles of the determinative role of the opinion of majority have been duly incorporated in the scheme of the Code, particularly in the provisions relating to voting on the Resolution Plan and binding nature of the vote of authorised representative on the entire class of the Financial Creditor(s) he represents. 210.6. To put it in more clear terms qua the homebuyers, the operation of sub-Section (3-A) of Section 25-A of the Code is that their authorised representative is required to vote on the Resolution plan is accordance with the decision taken by a vote of more than 50% of the voting share of the homebuyer; and this 50% is counted with reference to the voting share of such homebuyers who choose to cast their vote for arriving at the particular deci....