2021 (7) TMI 363 - Tri - Insolvency and Bankruptcy

Seeking to postpone the voting on proposed Resolution Plan/CoC meeting till the time the claims of the applicants are considered by the RP - HELD THAT - As the Members of the CoC have already voted on resolution plan, the prayer has become infructuous at this stage of the matter. Seeking direction to RP to amend the admitted amount of claim and include pre-EMI interest paid by the applicants - HELD THAT - It is evident from the material based before us that the applicants have been provided opportunity to meet Prospective Resolution Applicants (PRAs) and place their demands. It is the purely commercial decision of the PRAs to suitably address the issue of applicants. As the Resolution Plan already approved by the CoC is yet to be filed with this Authority, the prayer made against this item is premature at this juncture. Seeking direction to RP to correct the Information Memorandum and roll out to RA's for the affected claims/Units resolution Plan and to create a separate class of Subvention Buyers - Seeking to represent the subvention buyers' agenda in CoC meetings in view of complexities and limited/lesser time for IP appointment as AR for subvention buyers - HELD THAT - These cannot be granted for the reason that the Insolvency Bankruptcy Code does not envisage/recognize a sub-class of homebuyers within the Class of Homebuyers as Financial Creditors as prayed for by the Applicants against these points. Hence, these prayers are rejected. Seeking to direct RP to consider the claim of the buyers who had submitted an affidavit for cancellation but neither refund was made nor tripartite agreement was cancelled - HELD THAT - The Resolution Professional are directed to consider the claim of the buyers who had submitted an affidavit for cancellation but to whom no refund was made, nor the tripartite agreement was cancelled, in respect of such buyers, the unit cancellation shall be revoked and they shall rank pari passu in relation to all other Homebuyers in class in relation to all their claims, rights and obligations etc. Application disposed off.

Summary

Issues:
1. Relief sought by home buyers under section 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Non-payment of pre-EMI interest under subvention scheme.
3. Recognition and treatment of subvention scheme home buyers' claims within the Corporate Debtor's resolution plan.
4. Appointment of authorized representative for subvention buyers in CoC meetings.
5. Consideration of claims for cancellation and refund by affected buyers.
6. Role and responsibilities of the Resolution Professional in addressing home buyers' grievances.

Issue 1: Relief sought by home buyers under section 60(5) of the Insolvency and Bankruptcy Code, 2016

The 31 Home buyers sought various reliefs, including postponing the voting on the proposed Resolution Plan, amending the admitted amount of claim to include pre-EMI interest, correcting the Information Memorandum, appointing an authorized representative for subvention buyers, and considering claims of buyers who had submitted cancellation affidavits. The applicants highlighted the Corporate Debtor's failure to pay pre-EMIs, leading to threats of non-payment and cancellation of units. The Resolution Professional (RP) acknowledged the complexity of subvention buyers' claims and suggested collating claims to address the issue effectively. However, the RP did not directly include the applicants in the Information Memorandum, leading to concerns about their grievances not being recognized in CoC meetings.

Issue 2: Non-payment of pre-EMI interest under subvention scheme

The RP's reply emphasized that the main grievance of the applicants was the non-payment of pre-EMI interest. The RP stated that negotiations on the Resolution Plan did not include pre-EMI interest for the applicants under the subvention scheme. The RP highlighted discrepancies in principal amounts claimed by some applicants and reserved the right to reconcile these amounts. The RP also mentioned that the applicants' demands for pre-EMI interest were addressed during CoC meetings, with responses provided by the Prospective Resolution Applicants (PRAs).

Issue 3: Recognition and treatment of subvention scheme home buyers' claims within the Corporate Debtor's resolution plan

The Tribunal rejected the applicants' prayers for creating a separate sub-class of homebuyers within the Class of Homebuyers as Financial Creditors. The Tribunal stated that the Insolvency & Bankruptcy Code does not recognize such sub-classes. However, the Tribunal directed the RP to consider the claims of buyers who had submitted cancellation affidavits but had not received refunds, revoking unit cancellations and ensuring equal treatment with other Homebuyers in terms of claims, rights, and obligations.

Issue 4: Appointment of authorized representative for subvention buyers in CoC meetings

The Tribunal rejected the prayer for appointing an authorized representative for subvention buyers, as the Code does not allow for sub-classes of homebuyers. Therefore, the request for a separate representation was not granted.

Issue 5: Consideration of claims for cancellation and refund by affected buyers

The Tribunal directed the RP to consider the claims of buyers who had submitted cancellation affidavits but had not received refunds. These buyers were to be treated on par with other Homebuyers regarding their claims, rights, and obligations.

Issue 6: Role and responsibilities of the Resolution Professional in addressing home buyers' grievances

The Tribunal emphasized that the RP's role is not to negotiate but to facilitate the process, leaving the treatment of debts to the Resolution Applicant and approval to the CoC. The Tribunal disposed of the application, granting relief on specific claims while rejecting others based on the legal framework of the Insolvency & Bankruptcy Code.

This detailed analysis of the judgment addresses the key issues raised by the home buyers and the responses provided by the Tribunal, RP, and other involved parties within the legal framework of the Insolvency and Bankruptcy Code, 2016.