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2022 (6) TMI 108 - AT - Insolvency and BankruptcyRefusal to entertain the belated claims of Homebuyers as Financial Creditors of the Corporate Debtor - rejection of claim having been filed after delay of eight months from the cut-off date - whether after approval of the Resolution Plan on 20.07.2021 by CoC, the claim of the Appellant(s) stood extinguished? - Resolution Professional is required to include details of Homebuyers as reflected in the records of the Corporate Debtor in the Information Memorandum, even though they have not filed their claim before the Resolution Professional within time? - dealing with Resolution Plan regarding Homebuyers, whose names and claims are reflected in the record of the Corporate Debtor, although they have not filed any claim. Whether the Adjudicating Authority has rightly rejected the IAs filed by the Appellant(s) seeking direction to include their claims, which was belatedly filed? - HELD THAT - There is no dispute between the parties that the claim by the Appellant(s) were filed beyond the timeline prescribed in Form-A. Form-A required that the claims to be filed by 11.11.2020, whereas the claims were filed by the Appellant(s) on 14.07.2021, 23.07.2021 and in 09.11.2021. The List of Creditors was already published by Resolution Professional, which did not include the name of the Appellant(s). The Resolution Plan as submitted by Resolution Applicant was based on List of Creditors as published by Resolution Professional. It is true that Homebuyers whose number runs in several hundred in real estate project belong to different class of Financial Creditors. All Homebuyers who have booked a flat may not normally be residing in the area where Corporate Debtor has its corporate office and registered office - The Homebuyers are a class belonging to middle class of society and majority of whom, who book flat has taken loan from Banks and other financial institutions and they are saddled with liability to pay their loan from their hard-earned income they make payment to the Corporate Debtor in hope of getting a possession of the flat for their residence. Non-submission of claim within the time prescribed is a common feature in almost all project of real estate. But as law exists today, they cannot be included in the List of Creditors and that too after approval of Plan by CoC. There are no ground to interfere with order of the Adjudicating Authority rejecting their Application for admission of their claim. Whether after approval of the Resolution Plan on 20.07.2021 by CoC, the claim of the Appellant(s) stood extinguished? - HELD THAT - The Hon ble Supreme Court in GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR ORS. 2021 (4) TMI 613 - SUPREME COURT while dealing with the similar question, concluded in paragraph 102.1 and held that once Resolution Plan is approved by the Adjudicating Authority, the claims as provided in the Resolution Plan shall stand frozen and all such claims, which are not part of Resolution Plan shall stand extinguished - It is thus clear that extinguishment of claim of the Appellant(s) shall happen only after approval of the Plan by the Adjudicating Authority. The argument of the Respondents that since CoC has approved the Resolution Plan, the claim of the Appellant(s) have been extinguished, cannot be accepted as there is no extinguishment of claim of the Appellant(s) on approval of Plan by the CoC. Whether the Resolution Professional was obliged to include the details of Homebuyers as reflected in the records of the Corporate Debtor in the Information Memorandum, even though they have not filed their claim before the Resolution Professional within time? - Whether Resolution Applicant ought to have also dealt with Resolution Plan regarding Homebuyers, whose names and claims are reflected in the record of the Corporate Debtor, although they have not filed any claim? - HELD THAT - Looking to the procedure as is prevalent regarding filing of the claim by Financial Creditors, large number of Homebuyers are unable to file their claim within the time due to various genuine reasons related to such Homebuyers. Homebuyers make payment to the Corporate Debtor, receive allotment letter from the Corporate Debtor and also enter into Builder Buyers Agreement. All the documents pertaining to Homebuyers are on the record of the Corporate Debtor and Interim Resolution Professional/ Resolution Professional does take charge also of all the records of the Corporate Debtor. Even though, Interim Resolution Professional/Resolution Professional are not obliged to include the name of such Homebuyers, who have not filed the claim within the time in their List of Creditors, but there is no reason for not collating the claims of such Homebuyers whose claims are reflected from the records of the Corporate Debtor, including their payments and allotment. When the allotment letters have been issued to the Homebuyers, payments have been received, there are Homebuyers and there is obligation on the part of real estate Company to provide possession of the houses along with other attached liabilities. The liability towards those Homebuyers, who have not filed their claim exists and required to be included in the Information Memorandum. Further, under Regulation 36, sub-regulation 2(l), there is column for other information, which the Resolution Professional deems relevant to the Committee - The purpose of CIRP of Corporate Debtor is to find out all liabilities of the Corporate Debtor and take steps towards resolution. Unless all liabilities of the Corporate Debtor are not known or included in the Information Memorandum, the occasion to complete the CIRP shall not arise. In the present case there is no denial that details of the Appellant(s) and other Homebuyers, who could not file their claims has not been reflected in the Information Memorandum. There being no detail of claims of the Appellant(s), the Resolution Applicant could not have been taken any consideration of the claim of the Appellant(s), hence, Resolution Plan as submitted by Resolution Applicant cannot be faulted - the ends of justice would be met, if direction is issued to Resolution Professional to submit the details of Homebuyers, whose details are reflected in the records of the Corporate Debtor including their claims, to the Resolution Applicant, on the basis of which Resolution Applicant shall prepare an addendum to the Resolution Plan, which may be placed before the CoC for consideration. Appeal disposed off.
Issues Involved:
1. Whether the Adjudicating Authority rightly rejected the IAs filed by the Appellant(s) seeking direction to include their belatedly filed claims. 2. Whether after approval of the Resolution Plan on 20.07.2021 by CoC, the claim of the Appellant(s) stood extinguished. 3. Whether the Resolution Professional was obliged to include the details of Homebuyers as reflected in the records of the Corporate Debtor in the Information Memorandum, even though they did not file their claims within time. 4. Whether the Resolution Applicant ought to have dealt with the Resolution Plan regarding Homebuyers, whose names and claims are reflected in the record of the Corporate Debtor, although they did not file any claim. Detailed Analysis: Issue 1: Rejection of Belated Claims The Adjudicating Authority rejected the IAs filed by the Appellant(s) seeking the inclusion of their claims, which were filed beyond the timeline prescribed in Form-A. The claims were filed on 14.07.2021, 23.07.2021, and 09.11.2021, while the deadline was 11.11.2020. The Tribunal referenced the judgment in *Mukul Kumar vs. M/s RPS Infrastructure* and noted that new claims cannot be entertained once the Resolution Plan has been approved by the CoC and is pending before the Adjudicating Authority. The Tribunal acknowledged that Homebuyers often do not file claims within the prescribed time due to various reasons, but as the law stands, their claims cannot be included after the approval of the Plan by CoC. Issue 2: Extinguishment of Claims After CoC Approval The Tribunal concluded that the claims of the Appellant(s) do not extinguish merely upon the CoC's approval of the Resolution Plan. The extinguishment of claims occurs only after the Adjudicating Authority approves the Plan, as per Section 31(1) of the Code and the Supreme Court's ruling in *Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited*. Issue 3: Obligation of Resolution Professional Regarding Homebuyers' Details The Tribunal noted that the Resolution Professional should have included the details of Homebuyers, whose claims were reflected in the records of the Corporate Debtor, in the Information Memorandum. Regulation 36 of CIRP Regulations mandates the inclusion of assets and liabilities, which encompasses the claims of Homebuyers. The Tribunal emphasized that the purpose of CIRP is to ascertain all liabilities of the Corporate Debtor for appropriate resolution, and the exclusion of Homebuyers' claims leads to an incomplete and inequitable resolution process. Issue 4: Consideration of Homebuyers' Claims in Resolution Plan The Tribunal referenced the judgment in *Amit Goel vs. Piyush Shelters India Private Ltd.*, where it was held that excluding a significant number of Homebuyers from the Resolution Plan leads to unfair treatment. The Tribunal directed that the Resolution Professional should provide details of Homebuyers' claims to the Resolution Applicant, who should then prepare an addendum to the Resolution Plan. This addendum should be considered by the CoC and subsequently by the Adjudicating Authority. Conclusion and Directions: The Tribunal directed the Resolution Professional to submit the details of Homebuyers' claims to the Resolution Applicant within one month. The Resolution Applicant is to prepare an addendum and present it to the CoC within a further month. The CoC should consider the addendum and submit its decision to the Adjudicating Authority, which will then finalize the Resolution Plan considering the addendum. The appeals were disposed of with these directions, ensuring that the claims of Homebuyers are appropriately addressed in the Resolution Plan.
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