TaxTMI 
TaxTMI 
2024 (7) TMI 692
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....Bench (Court - II) (in short 'Adjudicating 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., 1....
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.... 4th category of the Resolution Plan. 8. At this stage, it would be desirable 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 Prad....
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....lass of creditors which reads as under :- "It has already been provisioned under Chapter - 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 t....
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....port his case that the Adjudicating Authority should not have placed too much emphasis on the title of the document and rather should 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 ca....
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....l in case of Sabari Reality Vs. Sivana Reality [(2023) ibclaw.in 775 NCLAT] also laid down distinction in between affected and not affected persons. 36. 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 Appellan....
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....he judgment of Hon'ble Supreme Court of India in the case of Pioneer Urban Land Infrastructure Limited & Ors. Vs. Union of India (UOI) & Ors. [AIR 2019 SC 4055] the relevant portion of the 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 ignit....
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....e and illustrative and may include Homebuyer or unit owner or any commercial property owner. 48. The Code or the RERA Act, 2016 do not differentiate anywhere between the Homebuyers who purchase units for his own consumption 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 ....
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....rs are entitled to receive only 5% of the principal amount and the payment to be made within 6 months from the Effective date. 55. We have noted that the Appellant has entered into agreement by way of MOU dated 24.05.2016 with the Corporate Debtor, whereby the Appellant 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 annu....
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....esidential, is sold to allottee or homebuyers, the details of such property for which agreement to sale is executed is specified and may include, inter-alia, the name of allottee, payment details, unit details, area, rate, the adjacent unit directions, etc., to make it specific and 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 M....
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....llenged as stipulated in several judgments of this Appellate Tribunal as well as Hon'ble Supreme Court of India. In this connection we note that the COC has voted in favour of the Resolution Plan of Respondent No. 2 by 100% voting rights. At this juncture, it is significant to point out that the homebuyers 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 pa....
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....ss, the minority of those who vote, as also all others within that class, are bound by that decision. There is absolutely no scope for any particular person standing within that class to suggest any dissention as regards the vote the Resolution Plan. It is obvious that if this finality and binding force is not provided 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 i....
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....uyers is one aspect of the scheme under the IBC. Subsequent steps in the IBC including the preparation of Resolution Plan are based on the list of Creditors, admitted claims of the Creditors etc. as per the scheme of the IBC, but the principle of promissory estoppel cannot be pressed against the Resolution Applicant, who submits Resolution Plan on the basis of relying on the Information Memorandum, the list of Creditors and other aspect of the matter. The Resolution Applicant has not extended any promise to the Financial Creditors of the Corporate Debtor that the claim submitted by Financial Creditor or any other creditor shall be accepted in toto. The mandatory contents of the Resolution Plan are laid down in the CIRP Regulations, 2016. If a Resolution Plan is compliant with the provision of Section 30, sub-Section (2) of the IBC and the provisions of the Regulations, 2016, the Plan cannot be faulted on the ground of the promissory estoppel, which the Appellant is pressing against the Resolution Professional, who has admitted the claim. We, thus, are of the view that submission of the Appellant based on the doctrine of promissory estoppel cannot be pressed into service in referenc....
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.... Creditors Financial 55,61,81,028 55,61,81,028 20,00,00,000 3. Financial Creditors. in Class (Allottees/ Flat Owners)- Whose Possession has been handed over to Flat Owners II Whose Possession of flats to Flat Owners is pending as 2,19,35,55,454 on CIRP date III. Cancelled Units (Having valid BBA) IV. Cancelled Units (not having valid BBA) 76,92,94,658 Date: Within 90 days (Quarter 1) Rs. 3 Crore Within 180 day (Quarter 2) - Rs. 3 Crore Within 270 days (Quarter 3) Rs. 3 Crore . Within 360 days. (Quarter 4) Rs. 6 Crore 100% of Admitted Principal Amount as adjustment against allotted units in the project within the timelines envisaged in the plan or 40% of the Admitted Principal Amount as cash refund in cases of cancellation where the Allottees de not opt for the adjustment, as the case may be. The detailed terms of the financial proposal for each category of the Flat Owners have been in provided for in Para 2 of the table in 8.3.3 Document 3 RESOLUTION PLAN IN THE MATTER OF AADI BEST CONSORTIUM PRIVATE LIMITED STRICTLY CONFIDENTIAL - (....
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....the basic price for the/Said Aregawhich includes charges and payments on account of provision of hundred per cep100 pour back up, external electrification and fire-fighting installations dely. Cistellation of electricity metes security deposit, energizing charges etc. and of incident/Charges payable directly in the name of the competent authority for regisrtion and ecution of conveyance dece of the Said Area and or for the registration of this Moo required. charges for provision of any other items facilities which may or may not specifically be provided or mentioned in this MOU and may be required by any of the authorities or considered appropriate by the Company, any levies, taxes, cess like service tax. turnover ax/ VAT. ete or any other levies/taxes.cess imposed by the Central or State Government or any authorities shall be paid by the Buyer. Document 5 The Allottes has already paid an amount of Rs.10,00,00,000 (Rupees Ten Crore only) linclusive of ves) aller deducting applicable tax under section 194-1A of the Income Tax Act 1961 Net amount- Rs. 9,90,00.- Rupees Nine Crores Ninety Lakhs only) as per details below, as part payment towards....
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.... 'unsecured Financial Creditors' other than the home buyers of the Company (the "unsecured Financial Creditors") is amount to Rs. 10,50,00,000/- out of which claims aggregating to Rs. Nil have been admitted for the purposes of CERP by the Interim Resolution Professional ("Admitted unsecured Financial Debt") and the same are kept under verification. Since the IRP has not admitted these claims, the payment proposed for such unsecured Financials Creditors. (Other than Class of Creditors) shall be NIL il. If any of the claims following under unsecured Financial Creditors (other than the class of Creditors) are admitted by the NCLT after the approval of Resolution Plan by the COC than RA proposes to settile such claims out of the contingent fund allocated in the Resolution Plan, subject to a maximum of 1% of such admitted claim amount. iii. Further, with respect to the amount payable to the Unsecured Financial Creditors categories (other than class of creditors) including accrued or unpaid interest arising after Insolvency Commencement Date and until the date of approval of the resolution plan by the Hon'ble Adjudicati....
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.... the certified outstanding scope of work as provided by the Interim Resolution Professional which is annexed as Annexure-2. Upon completion of the aforementioned scope of work, the Project shall be deemed to be completed in all respects for the purposes of RA's obligation towards Project completion under this Resolution Plan b. No additional scope of work shall be undertaken by the RA and no claims pertaining to the same shall be edmissible to the RA. Considering the completion Document 9 RESOLUTION PLAN IN THE MATTER OF AADI BEST CONSORTIUM PRIVATE LIMITED STRICTLY CONFIDENTIAL requires may require approvals from multiple govemment authorities, the Resolution Applicant shall be given a grace period of 1 Quarters (3 months) for completion of the project. By virtue of the order of the NCLT approving this Resolution Plan, the Corporate Debtor or the Resolution Applicant shall at no point of time be, directly or indirectly, held responsible or liable in relation. thereto for this delay. The RA sball keep the Monitoring Committee informed for the reasons of such delay, if any. Note: The Resolution Applicant shall be gi....
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....he rights of such Flat Owners / Allottees/ Homebuyers, whose claim have not been accepted/ sot filedshall stand extinguished and the said property would be available to the Resolution Applicant for sale. g. Notwithstanding anything stated above, any claims received for the execution of the registered Sale Deed from the 'Flat Owners whose Possession have been handed over shall be admitted/entertained by the RA/CD up to 90 days after the approval of Resolution Plan by the NCLT. h. After the approval of this Resolution Plan by the NCLT, other than the claims as specified above any and all other claims or demands made by or liabilities or obligations owed to or payable to (including any demand for any losses or damages, principal, interest, compound interest, pecal interest, liquidated damages, or notional and other charges already accrued accruing or in connection with any third party claims) any actual or potential Claims for principle by Flat Owners from the Corporate Document 11 RESOLUTION PLAN IN THE MATTER OF AADI BEST CONSORTIUM PRIVATE LIMITED STRICTLY CONFIDENTIAL Debtor, whether admitted or not, due or contin....
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....n. The Additional Consideration shall be charged as follows. S.N Category Flat Owners of Additional Consideration to be pald 1 Iconic Towers & Duplex Flat INR 150/- per Sq ft on the flat area. Owners 2 All Other Flat INR 75/- per Sq. ft on the Owners flat enca Residential Segment 3 All Other Flat Owners INR 150/- per Sq. ft on the flat ares Commercial & Retail Segment b. Further, for such Flat Owners whose registration is pending, there shall be additional cost added to the Additional Consideration in beu of the administrative efforts required to give effect to registered sale deed of the flat to the Flat Owners/Allottees/Home Buyers. This cost will be charged over and above the agreed amount payable as per respective allotment letters / Builder Buyer Agreement / Flat Buyers' agreement (BBA) whose registered sale deed is pending. This fee is proposed to be charged at the rate of Rs. 85,000/- plus applicable taxes, per ragistared sale deed, if any, from the Flat Owners / Home Buyers / Allottees (Residential & Commercial). II. Whose Possession of flats to Flat Ow....
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....e. d. The Flat owners shall be required to deposit / pay the outstanding dues / amounts, within 30 days from the Demand Date as demanded by the Resolution Applicant Corporate Debtor. In case payment is not made as per schedule, such payments can be within 90 days from the Demand Date, with an interest of 18% p.. e. If the payments are not made as demanded at the end of the 90 days or upon a request received from the Flat Owner, the Resolution Applicant shall be entitled to cancel the allotment after due notice period of not exceeding 30 days and the units shall be available to it as unsold unit immediately upon such cancellation. E Upon cancellation of such allotment, Allottees / Flat 2. Owners will be entitled to receive a refund after completion of project, 40% of principal amount paid within 15 months from the effective date by the Resolution Applicant or within 06 months from the re-sale of the Flats surendered/ cancelled by the RA, whichever is earlier. III. Cancelled Units (Having valid BBA): The Flat Owners whose claims have been admitted but their allotted Flats were cancelled by the CD, for any r....