9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (11) TMI 1057 - AT - Insolvency and BankruptcySeeking revival of Resolution Plan - Consensus for Settlement Plan reached or not - HELD THAT - It is pertinent to mention that the existing Promoter was originally landowners of the land on which the Project Orion Galaxy is situated and had entered into the development agreement with erstwhile promoters of the Company to develop the project Orion Galaxy . However, due to various reasons, the Project could not be completed by the erstwhile promoters on time, and as a result, the existing Promoter took control of the Project in 2017 and finally got complete control of the Company after 31.10.2019 when the existing Promoter purchased 100% shares of the Company after the order of NCLT, New Delhi. The Company has mainly launched Phase-I of the Project, in which 470 units, out of 542 units, have been sold out. In Phase-II, the Company has booked only 79 units, out of which 57 units have been booked and allotted to related parties, and only 22 units are sold to end-users/customers - The existing Promoter/Suspended Directors of the Company justifying the purported settlement plan submits that the Company requests to all the Stakeholders of the Company and the Project, to approve the aforesaid revival plan and allow the Management/Promoter to restart the construction. There are the following major reasons to approve the Revival Plan in the best interest of the Project and the Company a) The existing management is fully aware of the Project; in case there is a change in the management, the new management will take time to understand the various aspects of the Project. b) The CIRP process will only delay and proposed revival plan. However, the existing management will complete the Project within 15 months. c) The CIRP process will additionally burden the Project with additional costs. d) There is no clarity on who will bid for the Project and what will be offered. e) The management has agreed to hand over the Project in a time-bound manner and without any additional cost burden to the Buyer. f) The existing management will provide an approach road before completion of the Project. g) The Promoters has agreed to provide Personal and Corporate Guarantee for taking finance for the Project and made the provision and back up to start immediately without wasting any time. It is important to mention that no settlement plan encompassing all the allottees has been filed to date - It appears that the Appellant made a misleading statement before the Hon'ble Supreme Court that the settlement plan dated 13th February 2020 covers all the allottees. In fact, to date, there is no settlement plan covering all the allottees. There is no consensus among the allottees. Some of the Allottees favour the Settlement Plan, and others oppose the same. There is nothing on record to show that there is consensus for the purported Settlement plan. There is a trust deficit among the homebuyers. The proposed Reverse Insolvency appears to be a device for buying time. Based on the settlement plan and lack of consensus among allottees of flats and the present Promoters, there is no hope of success in arriving at a settlement. The Settlement Plan dated 12th February 2020 and the further Revised Settlement Plan dated 12th March 2021 deserves to be rejected - However, the settlement process is provided under Section 12A of the Insolvency and Bankruptcy Code, 2016. Therefore, if settlement takes place, the same can be filed U/S. 12A of the Code before the Adjudicating Authority. The Appeal is listed for hearing on 25th November 2021.
Issues Involved:
1. Admission of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Interim stay order restraining the Constitution of Committee of Creditors. 3. Filing and modification of the settlement plan by the Appellant. 4. Objections against the modification application and settlement plan. 5. Status report by the Interim Resolution Professional (IRP). 6. Trust deficit among homebuyers and the feasibility of the settlement plan. 7. Directions for the continuation of the Corporate Insolvency Resolution Process (CIRP). Issue-wise Detailed Analysis: 1. Admission of the Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016: The appeal was filed against the order of the Adjudicating Authority passed on 22nd November 2019, admitting the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, and appointing Interim Resolution Professional (IRP) Mr. Bhim Sain Goyal. 2. Interim Stay Order Restraining the Constitution of Committee of Creditors: On 19th December 2019, the Appellate Tribunal passed an interim stay order restraining the Constitution of Committee of Creditors (CoC). 3. Filing and Modification of the Settlement Plan by the Appellant: The Appellant filed IA No. 1115 of 2020 for modification of the order dated 26th February 2020. The Appellant claimed to have filed a settlement plan detailing the completion of the housing project and requested the modification of the order to allow the Appellant to work on the proposal. The Appellant argued that the settlement plan filed on 13th February 2020 covered all the allottees and that funds had been arranged to complete the project. 4. Objections Against the Modification Application and Settlement Plan: Interveners and non-applicants filed objections against the modification application, arguing that the application was against the interest of home buyers/financial creditors and the purpose of the IBC. They contended that the settlement agreement proposed by the Appellant did not encompass all home buyers, leading to the Tribunal's order on 26th February 2020 to proceed with the CIRP. 5. Status Report by the Interim Resolution Professional (IRP): The IRP submitted a status report on 26th March 2021, detailing the construction status, funds flow, concerns of homebuyers, and contractor’s concerns. The report indicated that the project was approximately 70% complete and highlighted the financial and logistical challenges in completing the project. The IRP also noted the lack of consensus among homebuyers and the concerns regarding the trustworthiness of the Appellant. 6. Trust Deficit Among Homebuyers and the Feasibility of the Settlement Plan: The Tribunal observed a significant trust deficit among homebuyers regarding the Appellant's ability to complete the project. Some homebuyers supported the reverse CIRP, while others preferred the project to be completed through the CIRP process due to distrust in the Appellant. The Tribunal noted that the proposed reverse insolvency appeared to be a device for buying time, and there was no consensus among allottees for the settlement plan. 7. Directions for the Continuation of the Corporate Insolvency Resolution Process (CIRP): The Tribunal concluded that the settlement plan dated 13th February 2020 and the revised settlement plan dated 15th March 2021 deserved to be rejected due to the lack of consensus and trust deficit among the allottees. The Tribunal directed the IRP/RP to hold a meeting of the Committee of Creditors within ten days to decide the future course of action for the completion of the CIRP of the Corporate Debtor. The appeal was listed for hearing on 25th November 2021, with instructions for parties to file their notes of submission in both soft and hard copies before the next hearing date.
|
