TaxTMI 
TaxTMI 
2025 (3) TMI 68
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.... the same order dated 14.05.2024 passed by the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench, Court - II) approving the resolution plan submitted by M/s. Max Heights Infrastructure Limited, the Successful Resolution Applicant (SRA). Appellant, unsecured Financial creditors of the corporate debtor aggrieved by the approval of the resolution plan has come up in these appeals. 2. Brief facts necessary to be notice for deciding the appeal are : i. On Section 7 Application filed by allottees of a housing project launched by corporate debtor, Suman Vilas Private Ltd., Corporate Insolvency Resolution Process (CIRP) against the corporate debtor commenced vide order dated 08.04.2022. ii. In pursuance of publication made by Interim Resolution Professional (IRP) on 10.04.2022, claim was filed by DKY Finance Private Limited & Ors. (appellant in Comp. App. (AT) (Ins.) No.1367/2024) as a Financial creditor of the corporate debtor, in 'Form - C'. Tribhawan K. Parnami also filed claim as a Financial creditor in 'Form - C'. Mohinder Kaur Sachdeva, Appellant has also filed a claim. The claim of all the appellants as unsecured Financial creditor was admi....
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....ordance with the Section 30(2). It is further contended that the value of the corporate debtor was Rs.24,27,79,954/- and the liquidation value was Rs.20,84,20,076/- where the resolution plan has lesser value of only Rs.10 Crore. It is submitted that unsecured financial creditors have been allowed only 13.81% of the amount which is to be paid within 24 months from the effective date. It is submitted that allottee i.e., unitholders have collectively 86.56% voting shares who have voted in favour of the resolution plan, have not been subjected to any haircut. 6. Learned counsel for the RP refuting the submissions of the appellant submits that in pursuance of the order of this Court dated 18.10.2024, in the present appeal, RP has filed an affidavit indicating the payment which is to be made to the dissenting financial creditor. It is submitted that the amount which is being paid to the dissenting financial creditor is in accordance with Section 30(2)(b). It is submitted that the homebuyers together hold 86.56% vote shares in the CoC. The only payment made in the plan is to the unsecured financial creditor who have been proposed payment of Rs.1.5 Crore and balance amount is used by th....
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.... (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in subsection (1) of section 53, whichever is higher and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1. - For the removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2. - For the purposes of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor-- (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal ....
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.... extract paragraphs 43 to 45 of the judgment: "43. Another submission, which has been pressed by learned Counsel for the Appellant(s) is that there is unfairness in bargain as is reflected from the Resolution Plan. It is submitted that whereas Financial Creditors are subjected to haircut of 93%, the Homebuyers are being given their flats without escalation of any price. Insofar as, haircut of 93% given to Financial Creditors is concerned, we have noticed above the judgment of the Hon'ble Supreme Court in Ramkrishna Forgings Ltd. where Adjudicating Authority was swayed away by haircut of 94.25% and Hon'ble Supreme Court in paragraph-34 of the judgment as extracted above observed that Adjudicating Authority was unduly swayed away with the haircut of 94.25%. 44. Coming to the giving of the flats to the Homebuyers under the Resolution Plan, without escalation of price, it is to be noted that Homebuyers are creditors in a class and they have been recognized as Financial Creditors by amendments made in the Code. This Tribunal in its judgment in Company Appeal (AT) (Insolvency) No.926 of 2019 - Flat Buyers Association Winter Hills - 77, Gurgaon vs. Umang Realtech Pvt. Lt....
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....not in derogation of the provisions of any other law for the time being in force, also makes it clear that the remedies under RERA to allottees were intended to be additional and not exclusive remedies. Therefore, provisions of the Code would apply in addition to RERA. 11. In most cases, the Committee of Creditors take 'haircut'. The Resolution Applicants satisfy them most of the time with lesser amount than the amount as determined. In the case of allottees (Financial Creditors), there cannot be a haircut of assets/ flats/ apartment." 45. With regard to assets, i.e, unit, it was observed by this Tribunal that units have to be transferred to Unsecured creditors - the Homebuyers and not to the Secured Creditors. Hence, comparison of their claim by the dissenting Financial Creditors from the Homebuyers, is not appropriate. The Homebuyers, who have been allotted the house and amount of consideration has already been fixed in the allotment and it was undertaken by the Corporate Debtor to handover the units on payment of consideration, no exception can be taken to handing over of the units to the Homebuyers on consideration, already paid. In this context, we may refer ....
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....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 operational creditors, or secured and unsecured creditors, must be paid the same amounts, percentage wise, under the resolution plan before it can pass muster. Fair and equitable dealing of operational creditors' rights under the said Regulation involves the resolution plan stating as to how it has dealt with the inter....
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....ch was done by the resolution applicant, without prejudice to its right to appeal against the aforesaid judgment, must therefore be set aside." 27. We, thus, are of the view that commercial wisdom of the Committee of Creditors, which has approved the Resolution Plan under which different treatment has been given to 'Affected Homebuyers' and 'Unaffected Homebuyers', cannot be faulted. We, thus, are of the view that there are no grounds made out to challenge the approval of the Resolution Plan. Further, the Adjudicating Authority has also rightly rejected the objections filed by the Appellant by I.A. No. 933 of 2022." 11. Law is well settled that jurisdiction of Adjudicating Authority and this Appellate Tribunal to interfere with approval of resolution plan is too limited. Adjudicating Authority can interfere with the approval of the resolution plan only in the case where there is a non-compliance of Section 30(2) of the IBC. 12. Coming to the submission of appellant that resolution plan was approved after expiry of CIRP period, appellant in his appeal itself has pleaded in paragraph 9 L regarding the above in following words : "9. L. Because the Ld. Adjudicat....