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2022 (11) TMI 648 - AT - Insolvency and BankruptcyValidity of approved Resolution Plan - Authorized Representative on behalf of majority of home buyers represented - Appellant has claimed that resolution plan, which was approved by the Adjudicating Authority, was non-compliant with the provisions of section 30(1) and 30(2) of the IBC and suffers from serious irregularities and is fraught with surreptitious amendments and insertions which are prejudicial to the genuine and legitimate interests of the members of the Committee of Creditors (CoC). HELD THAT - A perusal of the provisions relating to selection of Authorised Representative, the manner and modality of her/his participation in the CoC meetings to represent the views of the financial creditors in class is provided very clearly and elaborately in the IBC and the CIRP Regulations. The Authorised Representative so selected to participates in the CoC meetings as well as in decision making in the CoC, he does so on behalf of all the home allottees/homebuyers and the view of individual homebuyer is therefore subsumed in the majority (of more than 50%) decision coming through that process when the financial creditors in class express views and voted in any matter. This view is then placed before the CoC by the Authorised Representative. The Authorised Representative s primary duty and responsibility is to present the views of the financial creditors in class in the CoC meetings. We note that there is no deficiency or irregularity pointed out by the Learned Counsel for Appellant in the selection of the Authorised Representative. The fifteen Appellants in the present appeal are homebuyers. The Respondent No. 1 has stated that out of these 15 appellants, the name of one homebuyer Mr. Sharad Bhatnagar does not appear in the record of CoC - it is clear that a miniscule number of homebuyers have come before us as applicants and out of this small number, six have not even cared to cast their vote, have to sail with the decision of the majority of homebuyers. This is the scheme of IBC. Even if some of the homebuyers have not voted in favour of the plan, but the majority (more than 50%) have voted in favour of the resolution plan approving the same, the dissenting homebuyers who are in minority have to go along with the views of the majority - The appeal is disposed of on the ground of non-maintainability.
Issues Involved:
1. Compliance of the resolution plan with sections 30(1) and 30(2) of the Insolvency and Bankruptcy Code (IBC). 2. Provision for payment of debt to financial creditors (home buyers). 3. Adequacy of notice before the Committee of Creditors (CoC) meeting. 4. Approval of resolution plan for the number of projects. 5. Maintainability of the appeal. Issue-wise Detailed Analysis: 1. Compliance of the resolution plan with sections 30(1) and 30(2) of the Insolvency and Bankruptcy Code (IBC): The Appellant argued that the resolution plan submitted by M/s. Alpha Corp. Development Private Limited (Respondent No. 2) was non-compliant with sections 30(1) and 30(2) of the IBC. They claimed that the plan suffered from serious irregularities and surreptitious amendments prejudicial to the interests of the Committee of Creditors (CoC). However, the Tribunal did not find any substantial evidence to support these claims. The Tribunal noted that the resolution plan was approved by an overwhelming majority of 99.97% of the voting homebuyers, indicating compliance with the required provisions. 2. Provision for payment of debt to financial creditors (home buyers): The Appellant contended that the resolution plan did not make provisions for the payment of debt to 56% of the financial creditors (home buyers) who either voted against the plan or did not vote at all. The Tribunal referenced section 25-A (3A) of the IBC, which mandates that the Authorised Representative votes on behalf of all financial creditors he represents based on the majority decision. It was noted that the individual homebuyers' views are subsumed in the majority decision, and the dissenting minority must abide by the majority's decision. 3. Adequacy of notice before the Committee of Creditors (CoC) meeting: The Appellant claimed that the Resolution Professional did not provide sufficient notice before convening the CoC meeting, thus preventing proper examination of the proposed resolution plan. The Tribunal found that the process of selecting the Authorised Representative and the manner of participation in CoC meetings were clearly outlined in the IBC and CIRP Regulations. There was no deficiency or irregularity in the selection of the Authorised Representative, and the voting process was conducted in compliance with the regulations. 4. Approval of resolution plan for the number of projects: The Appellant asserted that the resolution plan was approved for four projects, not three, and that the Adjudicating Authority erred in its presumption. The Tribunal did not find this claim substantiated and noted that the resolution plan was approved by the CoC as per the majority decision, which included the projects in question. 5. Maintainability of the appeal: The Respondent No. 2 challenged the maintainability of the appeal, citing a previous dismissal of a similar matter by the Hon'ble Chairperson Bench of the Tribunal. The Tribunal agreed, noting that the appeal was not maintainable on the same grounds as the previous case. The Tribunal emphasized that once a majority decision is made by the financial creditors in class, the dissenting minority cannot independently challenge the decision. This principle was supported by the Supreme Court judgment in "Jaypee Kensington Boulevard Apartments Welfare Association and Ors. vs. NBCC (India) Ltd. and Ors.- 2021 SCC OnLine SC 253." Conclusion: The Tribunal dismissed the appeal on the ground of non-maintainability, stating that the dissenting homebuyers, being a minuscule minority, must abide by the majority decision. The resolution plan was found to be compliant with the IBC provisions, and there were no substantial grounds to interfere with the approval of the resolution plan. The appeal was disposed of, with no order as to cost.
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