TaxTMI 
TaxTMI 
2025 (11) TMI 1716
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..... App. (AT) (INS) No. 828 of 2024 and Rajkumar Pal, who is Power of Attorney Holder of Homebuyers, in Comp. App. (AT) (INS) No. 1298 of 2024 under Section 61 of the Insolvency and Bankruptcy Code, 2016 ('Code') against the same Impugned Order dated 20.03.2024 passed by the National Company Law Tribunal Bench, Mumbai Bench, Court-V ("Adjudicating Authority") in I.A. No. 828/2023 in C.P.(IB)-2946/MB/2019. 2. The details of the Respondents in Comp. App. (AT) (INS) No. 828 of 2024 are as follows: Bank of India is the Respondent No.1 herein. Mr. Manish Lalji Dawda (previously Mr. Vishal Ghisulal Jain), who is the Resolution Professional of Wadhwa Buildcon LLP, is the Respondent No.2 herein. Mr. Prabhat Jain, who is the Authorised representative of Financial Creditors in class of Homebuyers, is the Respondent No.3 herein. Mr. Vishal Parab, who is one of the CoC Member of Wadhwa Buildcon LLP, is the Respondent No.4 herein. Mr. Vishal Patil, who is one of the CoC Member of Wadhwa Buildcon LLP, is the Respondent No.5 herein. Capri Global Capital Limited who is one of the CoC Member of Wadhwa Buildcon LLP, is the Respondent No.6 herein....
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....r. 6. The Appellants submitted that pursuant to the said order, Mr. Rakesh Kumar Tulsyan was appointed as the Interim Resolution Professional ("IRP") to carry out the functions prescribed under the Code. The IRP issued a public announcement dated 30.07.2020 in Form A under Regulation 6 of the Insolvency Resolution Process Regulations, inviting the creditors of the Corporate Debtor to submit their respective claims. The first meeting of the Committee of Creditors ("CoC") was convened on 27.08.2020, wherein the Bank of India, being the sole financial creditor, whose claim had been verified at that stage, held 100% voting share. During the said meeting, the CoC deliberated on the business operations of the Corporate Debtor, including its ongoing projects, namely Wadhwa Rhodesia and Wadhwa Florence Pearl at Bhiwandi and Wadhwa Regalia at Kalyan (East) and further recorded that the Wadhwa Rhodesia project, mortgaged with the Bank, had unsold inventory of 72 flats apart from those committed to landowners under registered agreements. 7. The Appellants further submitted that in the first meeting itself, the CoC resolved to replace the IRP and appoint Mr. Vishal Ghisulal Jain as the R....
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....e reconstitution of the CoC, contending that the inclusion of landowners as financial creditors was incorrect. Consequently, the Bank of India filed IA No. 1035/MB/2021 before the Adjudicating Authority challenging such inclusion of land owners in the CoC and by the order dated 08.09.2021, the Adjudicating Authority allowed the application of the Bank of India and excluded the landowners from the CoC. The Appellants stated that the said order was challenged by the landowners before this Appellate Tribunal in Company Appeal (AT) (Insolvency) No. 821 of 2021 and this Appellate Tribunal stayed the operation of the impugned order on 08.10.2021, thereby restoring the status quo ante and allowing the landowners to continue as financial creditors. Subsequently, the CoC resumed its meetings, and in its 8th meeting held on 15.09.2021, it recorded the revised composition: Bank of India (43.63%), Capri Global Capital Ltd. (5.60%), and homebuyers as financial creditors in a class (50.71%). The homebuyers appointed Mr. Prabhat Jain as their Authorised Representative, whose appointment was later approved by the Adjudicating Authority on 20.04.2022. 12. The Appellants submitted that during the....
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.... 11.11.2022 and rejected the Resolution Plan, submitted by Mr. Ankit Suresh Wadhwa ignoring that the eligibility must be assessed as on 21.01.2021, when the original plan was submitted pursuant to the invitation under Section 25(2)(h) of the Code. 16. The Appellants stated that the Adjudicating Authority's finding that the revised plan constituted a "fresh" plan is perverse, as the revision was permitted by the CoC in exercise of its commercial wisdom and under the express authority of Regulation 39(1A) of the CIRP Regulations. The revision did not alter the fundamental structure of the plan but merely reflected updated information and financial adjustments. The Appellants further submits that the Resolution Plan conformed to Section 30(2) of the Code and the CIRP Regulations. 17. It is the case of the Appellants that the reliance placed on Section 29A of the Code is misconceived, as Mr. Ankit Suresh Wadhwa was allegedly declared as a willful defaulter by IndiaBulls on 30.10.2022, however, the Adjudicating Authority has erred in treating 11.11.2022 as the date of submission of the fresh Resolution Plan, despite the fact that the Resolution Plan was first submitted on 21.01.20....
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....l the averments made by the Appellants as misleading and baseless. 22. The respondent no.1 submitted that the appellants have sought to project an incorrect factual and legal narrative with respect to the representation of homebuyers and the role of their authorised representative, Shri Prabhat Jain. The respondent no.1 stated that the said Shri Prabhat Jain was duly appointed as the Authorised Representative (AR) of the homebuyers under Regulation 16A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and continued to represent them both before and after the passing of the impugned order. It was submitted that the minutes of the 16th, 17th, and 18th meetings of the CoC clearly establish that the homebuyers were consistently represented through their duly appointed AR, and never sought his replacement. 23. The respondent no.1 emphasised that a Power of Attorney or any similar instrument cannot confer statutory status of an AR under the Code. Hence, the appellant Mr. Rajkumar Pal in Comp App. (AT) (INS) No.1298 of 2024 who claims to represent the homebuyers on the strength of a Power of Attorney is wholly un....
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....as statutorily disqualified from being an eligible resolution applicant. 27. The respondent no.1 contended that Clause 1.15 of the RFRP categorically required that the resolution applicant must remain eligible under Section 29A of the Code at three stages i.e., as on the date of submission, consideration, and approval of the Resolution Plan, and that the applicant must submit a declaration of eligibility in the prescribed format at all stages. However, Mr. Ankit Suresh Wadhwa failed to furnish any such affidavit with the final plan, rendering his plan invalid in law. 28. The respondent no.1 submitted that the former RP failed to exercise due diligence and circulated an incomplete and inadequate report on the eligibility of the resolution applicants. The said report relied upon an affidavit of Mr. Ankit Suresh Wadhwa dated 30.11.2020, which pertained to a prior plan, and failed to verify the updated status of the resolution applicant under Section 29A of the code. The respondent no.1 contended that the Adjudicating Authority, therefore, correctly held that the Resolution plan submitted by Mr. Ankit Suresh Wadhwa could not be considered. 29. The respondent no.1 contended tha....
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....fied claims from the sole financial creditor, Bank of India, amounting to Rs. 32,57,14,026/-, which were duly admitted in full within the prescribed timelines. The IRP thereafter filed before the Adjudicating Authority a list of creditors and a report certifying the constitution of the CoC as on 18.08.2020, comprising solely of Bank of India holding 100% voting share. Subsequent to such constitution, the first CoC meeting was convened on 27.08.2020, wherein the IRP apprised the CoC regarding the business operations of the Corporate Debtor engaged in real estate development, including three ongoing projects - Wadhwa Rhodesia at Bhiwandi (351 units, of which 112 belonged to the landlord and 72 remained unsold), Wadhwa Regalia at Kalyan (East) (under joint development in a 50:50 ratio with construction stalled), and Wadhwa Florence Pearl at Bhiwandi (construction yet to commence). 35. The Respondent No.2 submitted that the erstwhile RP published Form G on 20.11.2020 inviting EoI, pursuant to which five EOIs were received, and subsequently two eligible PRAs-(i) Mr. Ankit Suresh Wadhwa (the promoter of the Corporate Debtor) and (ii) Mr. Hari Mulchandani and Mr. Bhagwandas Mulchandani....
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.... the number of homebuyers and their admitted claim amounts since the submission of the initial plans. Considering these developments, the CoC resolved that revised Resolution Plans be invited from the PRAs within 30 days of circulation of the revised Information Memorandum. The Respondent No.2 pointed out that the earlier Resolution Plans submitted by the PRAs were never deliberated upon or placed for voting by the CoC, nor was any verification of their eligibility under Section 29A of the Code carried out at that stage. 39. The Respondent No.2 submitted that pursuant to the aforesaid resolution, both the PRAs submitted their revised Resolution Plans in sealed envelopes on 11.11.2022. These plans were opened in the 13th CoC meeting convened on 17.12.2022, during which the erstwhile RP informed the CoC that the scrutiny of Section 29A eligibility of the PRAs and the vetting of their plans for compliance with the Code would first be undertaken. Only upon satisfaction of such compliance, the plans would be placed before the CoC for consideration and voting. It was during this period that the Mr. Ankit Suresh Wadhwa was officially declared a "wilful defaulter" by Indiabulls Housing ....
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....eriod by 180 days, the erstwhile RP published fresh Form G on 11.05.2024, inviting EoIs with the last date for submission of Resolution Plans fixed as 25.07.2024. Meanwhile, the Mr. Ankit Suresh Wadhwa, being aggrieved by the rejection of his plan, preferred the present Appeal, in which this Appellate Tribunal, vide order dated 10.05.2024, directed that the CIRP process may continue but that no Resolution Plan shall be put to vote during the pendency of the Appeal. 43. The respondent no.2 stated that the Bank of India had filed an application being IA No. 2265 of 2024 before the Adjudicating Authority seeking replacement of the erstwhile RP, Mr. Vishal Jain. The said application was initially deferred during the hearing held on 25.06.2024, as the erstwhile RP had undertaken before the Adjudicating Authority to convene a meeting of the CoC on the same day and to place the agenda for his replacement before the CoC for voting. The respondent no.2 submitted, however, that the said undertaking was never honoured, as the erstwhile RP, failed to place the agenda for his replacement before the CoC and did not circulate the minutes of the 18th CoC meeting. Consequently, the Adjudicating ....
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....10.2024, a resolution was proposed for the replacement of the erstwhile RP and for confirmation of the appointment of Mr. Manish Lalji Dawda (Respondent No.2 herein) as the Resolution Professional, in compliance with the order dated 28.08.2024 passed by this Appellate Tribunal. The said resolution was duly approved by the CoC with a voting share of 69%. The respondent no.2 further submitted that in the same meeting, the CoC also approved, by 100% voting share, the proposal to republish Form G, along with the eligibility criteria, the Request for Resolution Plan (RFRP), and the Evaluation Matrix. 48. The respondent no.2 stated that pursuant to the said resolution, a fresh Form G was published on 22.10.2024 inviting EoIs from PRAs. In response, twelve EoIs were received, out of which eleven applicants were declared eligible in the final list of PRAs issued on 28.11.2024. 49. The respondent no.2 submitted that before the last date of submission, resolution plans were received from two PRAs, including Mr. Ankit Suresh Wadhwa. The plans were opened during the 24th CoC meeting held on 15.02.2025, and the PRAs were invited to discuss their respective plans. The CoC also passed a res....
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....solution Plan as well as at the stage of approval of the Resolution Plan, keeping in view clause 1.15 of RFRP as well as undertaking affidavit given by all PRAs including, Mr. Ankit Suresh Wadhwa with all such terms and conditions of RFRP. 55. To recapitulate the series of events and impact on present appeal, the following dates become relevant :- (a) On 30.07.2018, the Corporate Debtor was declared as NPA on 30.07.2018, (b) On 28.07.2020, CIRP was initiated against the Corporate Debtor. (c) On 20.11.2020 Form- 'G' was issued. (d) On 30.11.2020 Mr. Ankit Suresh Wadhwa filed affidavit for compliance of Section 29A. (e) RFRP/ IM was issued on 15.12.2020. (f) On 21.01.2021, first Plan was submitted by Mr. Ankit Suresh Wadhwa on 21.01.2021 for Rs. 8.19 Crore. (g) On 30.10.2022, Mr. Ankit Suresh Wadhwa was declared as a wilful defaulter for non payment of some credit facilities to India Bulls Housing. (h) On 11.11.2022, Mr. Ankit Suresh Wadhwa gave new/ revised plan for Rs. 13,66,06,635/-. (i) On 20.01.2023, Mr. Ankit Suresh Wadhwa submitted his final Resolution Plan of Rs. 14.93 Crores. 56. It is the....
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....r in accordance with the guidelines of the Reserve Bank of India issued under the Banking Regulation Act, 1949 (10 of 1949); 240A. Application of this Code to micro, small and medium enterprises. - (1) Notwithstanding anything to the contrary contained in this Code, the provisions of clauses (c) and (h) of section 29A shall not apply to the resolution applicant in respect of corporate insolvency resolution process [or prepackaged insolvency resolution process/ of any micro, small and medium enterprises " (Emphasis Supplied) 62. We note that the RFRP was approved by the CoC in its fifth meeting, and the Appellant Mr. Ankit Suresh Wadhwa being a member of the COC did not raise any objection to any clause of the RFRP. In terms of clause 1.15 of the RFRP, the appellant duly acknowledged that he had to be eligible under section 29-A on: (1) the date of submission of the plan; (2) on the date of its consideration by the CoC; and (3) also on the date of its approval by the Adjudicating Authority. At this stage, we take into consideration Clause 1.15 pf RFRP, which reads as under: Clause 1.15 Disclosure The Resolution Applicant(s) acknowledges that he ha....
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....an affidavit along with the plan was never complied with by Mr. Ankit Suresh Wadhwa in respect of any of the plans, and accordingly, none of the plan submitted by him. 69. We also note that the issue of submission of resolution plan is dealt with by section 30 of the Code, and section 30 (2) stipulate duty upon the RP to confirm that each plan presented before the CoC is compliant with extant law, as also clause 1.4.1 of the RFRP, further section 30 (3) of the Code mandates presentation to the CoC of only such plans which conform to the conditions in section 30 (2) and regulation 39 (1B) (c) categorically stipulates that the CoC shall not consider any plan which does not comply with the provisions of section 30 (2) and regulation 39 (1). 70. Thus, it was for the Former RP to conduct due diligence qua section 29- A, in terms of regulation 36A (8), as also clauses 1.4.1, 1.1.8, 2.1.1 (b), and 2.1.3 of RFRP which apparently was not done by the Erstwhile RP. 71. We also take into consideration the submissions of the Respondent No.1 on a pure question of law which can be raised at any stage of the proceedings, provided that no new facts are pleaded. 72. In this connection, w....
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....nd owners later challenged their exclusion from CoC by the Adjudicating Authority before this Appellate Tribunal vide Comp. App. (AT) (Ins.) No. 821 of 2021 and the same was dismissed by this Appellate Tribunal on 08.10.2021. Thus, it is undisputed fact that the land owners who were initially included in the CoC were not entitled to participate and decide on the Resolution Plan, PRAs ab-initio. 76. The Respondent No.1 has again and again emphasised that the Mr. Ankit Suresh Wadhwa was ineligible on all three occasions, and even if for the sake of argument, the plan dated 11/11/2022 is not considered to be a fresh plan, even then, Mr. Ankit Suresh Wadhwa was ineligible on the subsequent two dates of reckoning in terms of Clause 1.15 of RFRA. It has also been argued that PRA who has been declared to be a wilful defaulter would certainly not be in any position to implement the plan even if the same was approved, considering that he would be blacklisted and effectively barred from availing institutional credit. 77. We note that Mr. Ankit Suresh Wadhwa has stated that he was not aware of the fact that he had been declared a wilful defaulter and subsequently paid outstanding money ....
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....ert name of the Resolution Applicant(s)] ("Resolution Applicant(s)"), refer to the RFRP and provide our unconditional acceptance of the terms and conditions of the RFRP as amended from time to time in accordance with the procedure set out under the RFRP, including but not limited to the Disclaimer contained in the RFRP. Further and in relation to the said RFRP and the Resolution Plan Process set out there under, the Resolution Applicant(s) undertakes, agrees and acknowledges that the Resolution Applicant(s) (collectively, the "Undertaking"): a) shall execute all such deeds and documents as may be required to be so executed pursuant to the completion of the Resolution Plan Process; b) has submitted the Binding Resolution Plan and other requisite documents strictly as per forms prescribed in the RFRP, without any deviations or conditions and without setting out any assumptions or notes qualifying the Resolution Plan; " (Emphasis supplied) We are of view that above affidavit again do not support cause of the Appellant. 80. We also take into consideration the fact that in similar cases where there was no challenge to the RFRP, it has been categorically held b....
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....1.2022, Mr. Ankit Suresh Wadhwa was not eligible u/s 29A of the Code because of him having been declared as wilful defaulter on 31.10.2022. 83. The respondent no.2 stated that after the fresh publication of Form G, the Appellant Mr. Ankit Suresh Wadhwa in Comp App (AT) (INS) No. 828 of 2024 once again submitted his EoI on 31.10.2024 and was duly declared eligible under Section 29A of the Code, as per the due diligence conducted by M/s Dcirrus. Consequently, a fresh resolution plan dated 17.03.2025 was submitted by the appellant, which was opened before the CoC during its 24th meeting. The respondent no.2 further stated that by letter dated 05.02.2025, Mr. Ankit Suresh Wadhwa requested that his earlier Earnest Money Deposits (EMD) of Rs. 50,000 (04.12.2020), Rs. 5,00,000 (20.02.2021), and Rs. 50,00,000 (27.01.2023), aggregating to Rs. 55,50,000, be adjusted towards the EMD required for the new plan submitted on 07.02.2025. The Respondent No.2 submitted that in these circumstances the resolution plan under challenge in the present appeal, in a manner stands withdrawn by Mr. Ankit Suresh Wadhwa himself as he has already participated in the fresh round of bidding after curing his ea....