2023 (4) TMI 508 - AT - Insolvency and Bankruptcy

Seeking to allow to add the escalation clause in the Resolution plan - seeking remittance of Resolution Plan of the Appellants to the CoC so that the escalation clause may also be added to the Resolution Plan - Approval of Resolution Plan pending - HELD THAT - As per office report, notice has been delivered to Respondent No.2 and 3 but no one appears on behalf of R3. Shri Amar Vivek is appearing on behalf of the R2 and supported the proposal submitted by the Appellant. In view of the peculiar facts and circumstances of the present case, much less the fact that the escalation has been accepted by the homebuyers, the appeal is allowed and the matter is remanded back to the Adjudicating Authority to take a fresh decision as early as possible but not later than one month from the date of appearance of the parties before it - Appeal allowed by way of remand.

Summary

Issues:
The judgment involves issues related to an application under Section 9 of the Insolvency and Bankruptcy Code, 2016, approval of Resolution Plan, addition of escalation clause in the Resolution Plan, and acceptance of the escalation cost by homebuyers.

Application under Section 9 of the Insolvency and Bankruptcy Code:
The case started with an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 against a Corporate Debtor. The application was admitted, and an Interim Resolution Professional (IRP) was appointed, later replaced by a Resolution Professional (RP) appointed by the Committee of Creditors (CoC). The homebuyers appointed an authorized representative, and the Resolution application was approved by the CoC.

Approval of Resolution Plan:
The Resolution Plan of the Appellant was approved by the CoC, and an application seeking approval was filed before the Adjudicating Authority. The application was allowed, leading to the approval of the Resolution Plan on a specific date.

Addition of Escalation Clause in the Resolution Plan:
The Appellant filed an application before the Adjudicating Authority to add an escalation clause in the Resolution Plan, which was dismissed. The Appellant then filed an appeal against this dismissal, seeking to include the escalation clause in the Plan.

Acceptance of Escalation Cost by Homebuyers:
Following an order by the Tribunal, the Appellant submitted a proposal to the Monitoring Committee to insert an escalation clause in the Resolution Plan. The homebuyers proposed different sets of terms regarding the escalation cost, which were considered. The Appellant accepted proposal No.2, which was then put to vote. The Class of Creditors approved the proposal for escalation of the cost of construction.

Final Decision:
The Tribunal, considering the acceptance of the escalation by homebuyers, allowed the appeal and remanded the matter back to the Adjudicating Authority for a fresh decision within a specified timeframe. The parties were directed to appear before the Adjudicating Authority on a given date for further proceedings.