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2021 (12) TMI 188 - Tri - Insolvency and BankruptcySeeking direction to Resolution Professional to not submit the Resolution Plan before the CoC - seeking stay on the process of voting to be held on 10.08.2021, on the two Resolution Plans - seeking restraint on members of the Association from name calling or defaming the parties herein - HELD THAT - It is seen that the applicants belong to the class of home buyers and being the class of creditors, they have filed this application to stay the process of voting to be held on 10.08.2021 on the two resolution plans and also a direction to the resolution professional not to submit the resolution plan. Hon'ble Supreme Court in the Jaypee Case 2021 (3) TMI 1143 - SUPREME COURT held that To sum up this part of discussion, in our view, after approval of the resolution plan of NBCC by CoC, where homebuyers as a class assented to the plan, an individual homebuyer or association cannot maintain any challenge to the resolution plan nor could be treated as carrying any legal grievance . Considering this position of law and particularly this fact that the CoC has already approved the resolution plan on 17.08.2021 - Application dismissed being not maintainable.
Issues Involved:
1. Compliance of the Resolution Plan with Section 30(2) of the Insolvency & Bankruptcy Code (IBC), 2016. 2. Voting process and its validity. 3. Allegations of discriminatory clauses and undue advantages in the Resolution Plan. 4. Eligibility and authorization of the Consortium to submit the Resolution Plan. 5. Maintainability of the application under Section 60(5) of the IBC. Issue-wise Detailed Analysis: 1. Compliance of the Resolution Plan with Section 30(2) of the Insolvency & Bankruptcy Code (IBC), 2016: The applicants argued that the Resolution Plan submitted by the Consortium was non-compliant with Section 30(2) of the IBC. They pointed out that the plan relied heavily on future payments from homebuyers without detailing the dues and debts of their members. The plan was also conditional upon amendments to the Consortium's bye-laws, which was against the RFRP's terms. The Tribunal noted that the plan's approval by the CoC with a 96.93% majority indicated compliance with the necessary legal provisions, as the CoC is the supreme authority to decide the eligibility criteria and RFRP in a CIRP. 2. Voting process and its validity: The applicants sought to stay the voting process scheduled for 10.08.2021. However, the Tribunal found that the voting had already taken place, and the Resolution Plan was approved by the CoC through e-voting on 17.08.2021 with a 96.93% majority. The Tribunal referenced Section 25A(3A) of the IBC, which mandates that the authorized representative cast votes on behalf of all financial creditors he represents, in accordance with the decision taken by a majority of the voting share. Therefore, the Tribunal deemed the voting process valid and binding. 3. Allegations of discriminatory clauses and undue advantages in the Resolution Plan: The applicants alleged that the Resolution Plan included discriminatory clauses favoring the Consortium, such as reduced EMD and Performance Security requirements. They contended that these relaxations discouraged other prospective resolution applicants. The Tribunal noted that the eligibility criteria and RFRP were approved by the CoC, and any modifications or relaxations were within the CoC's purview. The Tribunal also highlighted that the CoC's decision is binding on all PRAs, including the applicants. 4. Eligibility and authorization of the Consortium to submit the Resolution Plan: The applicants questioned the Consortium's authorization to submit the Resolution Plan, citing amendments to their bye-laws and a pending complaint challenging these amendments. The Tribunal observed that the Resolution Professional had verified the minutes of the meetings and obtained affidavits from the officers of the Consortium. The Tribunal further noted that the CoC had approved the Resolution Plan with a significant majority, implying that the Consortium's eligibility and authorization were adequately addressed. 5. Maintainability of the application under Section 60(5) of the IBC: The respondents argued that the application was not maintainable under Section 60(5) of the IBC, as the applicants had no locus standi to file it in their individual capacity. They also contended that the application had become infructuous since the CoC had already approved the Resolution Plan. The Tribunal referenced the Supreme Court's judgment in the Jaypee Kensington Boulevard case, which held that individual homebuyers or associations could not challenge a resolution plan once it had been approved by the CoC. Consequently, the Tribunal dismissed the application as not maintainable. Conclusion: The Tribunal dismissed the application, stating that it was not maintainable, as the CoC had already approved the Resolution Plan with a 96.93% majority. The Tribunal emphasized that the CoC is the supreme authority in determining eligibility criteria and RFRP in a CIRP, and individual homebuyers or associations cannot challenge an approved resolution plan.
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