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2024 (3) TMI 1139 - AT - Insolvency and BankruptcyObjection to Resolution Plan submitted - categorization of the Appellant as affected homebuyer - HELD THAT - On looking into the Agreement dated 09.08.2018, the Agreement although refers to several earlier events and proceedings prior to 09.08.2018, but it does not refer to Agreement dated 10.07.2015. Agreement dated 09.08.2018 having been executed subsequent to 15.09.2017, on which date the Corporate Debtor obtained loan from LICHFL, which obliged the Corporate Debtor to make an allotment only after the NOC from the LICHFL. The requirement of obtaining NOC was very much there and it is not the case of the Appellant that for allotment dated 09.08.2018, any NOC was obtained from LICHFL by the Appellant. Thus, categorization of the Appellant as affected homebuyer cannot be faulted - there is no error committed by the SRA in classifying the Appellant into affected homebuyer as his allotment dated 09.08.2018, having been obtained without NOC of LICHFL. Back door entry in the CIRP - HELD THAT - EOI was considered by the CoC. The subsequent events as noticed above indicate that IA No.643 of 2021, which was filed for approval of Resolution Plan of Vira Realspace LLP for Phase-1 was decided to be withdrawn by the CoC in its Meeting on 03.08.2021 and it was further resolved by CoC to rescind the previous From-G and issue a fresh advertisement for holistic resolution of the Corporate Debtor. Subsequently, on 08.08.2021 fresh Form-G was published, where, the last date for submitting of EOI was 23.08.2021. Respondent No.5 has submitted EOI on 17.08.2021 and thereafter submitted a Resolution Plan, which was deliberated and approved by the CoC. The submission advanced by the Appellant with regard to EOI submitted against Form-G, which was subsequently rescinded by the CoC is no more relevant - Resolution Plan, which ultimately was approved was in consequent to Form-G published on 08.08.2021 and there is not even any submission that with regard to Form- G dated 08.08.2021, there is any breach of timeline by Respondent No.5. Next submission of the Appellant is that when Plan with regard to Phase-1 was approved on 01.03.2021 by CoC and IA No.643 of 2021 was filed for approval of such Resolution Plan, the CoC could not have taken any decision to invite fresh Form-G, which makes the entire process of CIRP contrary to the Code and the CIRP Regulations - HELD THAT - In view of the CoC decision in its 13th Meeting to withdraw the Resolution Plan of Phase 1, the approval of Resolution Plan of Phase-1 was rendered infructuous, which was recorded by the Adjudicating Authority and no one has challenged the said order. It is also relevant to notice that CoC noted the issue as to whether the Resolution Plan of Phase-1 to be withdrawn and the said Agenda was approved by the CoC for withdrawal of Phase-1 Resolution Plan and Appellant also voted in favour of withdrawal of Phase-1, Resolution Plan, which material is on the record. It is difficult to see how the learned Counsel for the Appellant is raising submission that when there was approval of Resolution Plan of Phase-1, the CoC could not have proceeded further to issue fresh Form-G - there are no substance in this submission of learned Counsel for the Appellant. The next submission of learned Counsel for the Appellant that there was no due diligence with regard to Section 29A while approving the Resolution Plan of SRA - HELD THAT - From the facts brought on record, it does appear that Appellant is minority homebuyer, who is objecting to the approval of Resolution Plan, where majority homebuyers have voted in favour of the Resolution Plan, which is evident from the 99.96% vote share, the Plan has been approved - In view of the judgment of the Hon ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association 2021 (3) TMI 1143 - SUPREME COURT the Appellant has to sail with the decision of the majority of the homebuyers, who have decided to approve the Resolution Plan. Total number of homebuyers are 272, out of which 140 are affected home buyers and 132 are unaffected homebuyers. Out of 140 affected homebuyers, 86 have voted in favour of the Plan and only 26 have voted against the Plan. Thus, majority of homebuyers have voted in favour of the approval of the Resolution Plan. Hence, the Appellant cannot be heard to contend against the majority of homebuyers, who have decided to approve the Resolution Plan. The submission of the Appellant that RP conducted the CIRP in contravention of the Code and CIRP Regulations also does not find any substance from the materials on record and proceedings undertaken by the RP - there are no material irregularity in conducting the CIRP by the RP, which warrant interference. There are no ground to interfere with the impugned orders dated 19.07.2023, which are sought to be challenged in these two Appeals - appeal dismissed.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Classification of homebuyers as 'affected' and 'unaffected'. 3. Alleged preferential treatment and backdoor entry of the Successful Resolution Applicant (SRA). 4. Conduct of the Corporate Insolvency Resolution Process (CIRP) by the Resolution Professional (RP). 5. Approval of the Resolution Plan. Summary: 1. Condonation of Delay: Interlocutory Application Nos. 4551 and 4554 of 2023 were filed by the Appellant(s) for condonation of delay of 13 and 6 days in filing the Appeal. The delay was condoned as sufficient cause was shown by the Appellant(s). The applications were disposed of accordingly. 2. Classification of Homebuyers: The Appellant challenged the classification of homebuyers into 'affected' and 'unaffected' categories. The 'affected homebuyers' were those who were allotted units without obtaining a No Objection Certificate (NOC) from LIC Housing Finance Ltd. (LICHFL), while 'unaffected homebuyers' had obtained NOCs. The Tribunal upheld this classification, noting that the allotment made without NOC was void, and fresh allotments were made under the Resolution Plan with reduced areas. The Tribunal referenced its previous judgment, which had already upheld this classification. 3. Alleged Preferential Treatment and Backdoor Entry: The Appellant argued that the SRA, Kabra Estate and Investment Consultants, was given preferential treatment and allowed a backdoor entry by submitting its Expression of Interest (EOI) after the deadline. The Tribunal found that the CoC had resolved to allow the SRA to submit its EOI and that a fresh Form-G was published, inviting EOIs for a holistic resolution of the Corporate Debtor. The SRA submitted its EOI within the new timeline, and the Tribunal found no breach of regulations. 4. Conduct of CIRP by RP: The Appellant contended that the RP violated the Insolvency and Bankruptcy Code, 2016, and the CIRP Regulations, claiming material irregularity in the process. The Tribunal rejected these claims, noting that the RP had conducted the CIRP in accordance with the Code and Regulations. The Tribunal also observed that the Appellant had voted in favor of withdrawing the Phase-1 Resolution Plan, which was subsequently rescinded and replaced with a fresh Form-G. 5. Approval of the Resolution Plan: The Appellant challenged the approval of the Resolution Plan, arguing that the RP did not conduct due diligence u/s 29A. The Tribunal found that an affidavit of compliance with Section 29A was submitted, and the CoC had deliberated and approved the Plan. The Tribunal noted that the Resolution Plan was approved by 99.96% of the CoC's voting shares, including both 'affected' and 'unaffected' homebuyers. The Tribunal emphasized that a minority homebuyer must sail with the majority decision, referencing the Supreme Court's judgment in Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Versus NBCC (India) Ltd. & Ors. The Tribunal found no grounds to interfere with the impugned orders approving the Resolution Plan. Conclusion: The Appeals were dismissed, and the Tribunal upheld the impugned orders dated 19.07.2023, approving the Resolution Plan. Each party was ordered to bear its own costs.
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