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2024 (7) TMI 692 - AT - Insolvency and BankruptcyValidity of Resolution Plan - classification of the Appellant's Claim - Locus to challenge the Resolution plan approved by CoC, as the Appellant is an individual member of Financial Creditor - genuine homebuyer or a speculative investor - HELD THAT - From the definition of the Code of Homebuyers as Financial Creditors as contained in Section 5(8)(f) along with two explanation along with definition of Allottees and Real Estate Projects as contained in Section 2(d) and 2 (zn) of the RERA Act, 2016, it is clear that any allotee who has paid the amount in the Real Estate Project shall be deemed to be Financial Creditor and the said amount paid to Real Estate Developers will be treated having commercial effect of the borrowing - The Code or the RERA Act, 2016 do not differentiate anywhere between the Homebuyers who purchase units for his own consumption or the Homebuyers or unit purchaser who purchase the multiple units for commercial purposes. It becomes clear that whether the homebuyer/ allottee is genuine homebuyer or genuine allottee or speculative homebuyers/ allottee but if he has paid the money for acquisition of such properties or given the advance, such allottee/ homebuyer shall be treated as Financial Creditor in terms of Section 5(8)(f) of the Code . Hence, the pleadings of the Respondent No. 2 in this regard that the Appellant is speculative investor will not affect the rights of the Appellant to be treated as the Financial Creditors. From judgment of Essar Steel India 2019 (11) TMI 731 - SUPREME COURT , it is clear that once the CoC approves the Resolution Plan by the requisite majority, the same cannot be challenged by any individual unit buyer/ homebuyer like the Appellant in the present appeal - This makes absolutely clear that the Resolution Plan may provide different categories of creditors and different payment schemes, as seen in the present case which is valid and legally enforceable. The ratio of the above judgment is very explicit and clear and therefore we find that the Appellant has no locus in the present appeal to challenge the Resolution Plan or his classification in category 4 of the Resolution Plan on his own as individual homebuyer/ allottees. There are no merit in the appeal. The appeal devoid of any merit stands dismissed.
Issues Involved:
1. Validity of Memorandum of Understanding (MOU) as equivalent to Builder Buyer Agreement (BBA). 2. Classification of the appellant's claim under the Resolution Plan. 3. Rights of speculative investors versus genuine homebuyers. 4. Commercial wisdom of the Committee of Creditors (CoC). Issue-wise Detailed Analysis: 1. Validity of Memorandum of Understanding (MOU) as equivalent to Builder Buyer Agreement (BBA): The appellant argued that the MOU dated 24.05.2016 should be treated as equivalent to a BBA. The appellant cited various clauses of the MOU to support this claim. However, the Tribunal noted that the MOU did not specify any particular units, floors, or other details required for a valid BBA. The Tribunal emphasized that the definition of "allottee" under Section 2(d) of the RERA Act is quite broad but requires a "separate and self-contained part of any immovable property," which was not specified in the MOU. The Tribunal concluded that the MOU could not be treated at par with a BBA, thus rejecting the appellant's claim. 2. Classification of the appellant's claim under the Resolution Plan: The appellant was classified under category 4, "Cancelled Units (not having valid BBA)," and argued that they should be under category 2, "Whose Possession of Flats to Flat Owners is pending as on CIRP date." The Tribunal noted that the appellant's MOU did not specify any units, making it ineligible for category 2. The Tribunal further noted that the commercial wisdom of the CoC, which approved the Resolution Plan with 100% voting, cannot be challenged. The Tribunal found no merit in the appellant's argument and upheld the classification under category 4. 3. Rights of speculative investors versus genuine homebuyers: The Tribunal examined whether the appellant was a genuine homebuyer or a speculative investor. It referred to the judgment of the Hon'ble Supreme Court in Pioneer Urban Land Infrastructure Limited & Ors. Vs. Union of India (UOI) & Ors. [AIR 2019 SC 4055], which allows differentiation between genuine homebuyers and speculative investors. The Tribunal noted that the MOU contained clauses for rental returns and interest payments, which are not typical in BBAs, indicating that the appellant was more of a speculative investor. However, the Tribunal also noted that the issue of speculative investors is relevant only at the stage of admission of CIRP under Section 7 of the Code and does not affect the appellant's status as a financial creditor. 4. Commercial wisdom of the Committee of Creditors (CoC): The Tribunal emphasized that the commercial wisdom of the CoC, which approved the Resolution Plan with 100% voting, cannot be challenged. It cited the judgment of the Hon'ble Supreme Court in Essar Steel India Limited Through Authorised Signatory vs. Satish Kumar Gupta & Ors., [(2020) 8 SCC 531], which allows differential treatment of different categories of creditors. The Tribunal also referred to the judgment in Jaypee Kensington Vs. NBCC [(2022) 1 SCC 401], which states that no individual homebuyer has the locus to challenge a Resolution Plan approved by the requisite majority of the CoC. The Tribunal found that the appellant had no locus to challenge the Resolution Plan or their classification in category 4. Conclusion: The Tribunal dismissed the appeal, finding no merit in the appellant's arguments. The classification of the appellant under category 4 was upheld, and the commercial wisdom of the CoC was deemed unchallengeable. The appeal was dismissed with no costs, and all interlocutory applications were closed.
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