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TMI Blog2019 (12) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors and hence the objections made by the Applicants are not sustainable A conjoint reading of Section 25(2)(h) of the IBC, 2016 with Regulation 36A (10), (11) and (12) would posit the fact that objections to inclusion or exclusion of a prospective resolution applicant in the provisional list referred to in sub-regulation (10) can be made with supporting documents within five days from the date of issue of the provisional list - In the present case, the intended prospective resolution applicant viz. Sai Trading and Interiors has expressed their interest by way of an email to the Resolution Professional on 17.04.2019 and his name was included in the provisional list of resolution applicant released by the Resolution Professional on 23.04.2019, however his name was left out from the final list of prospective resolution applicant released by the Resolution Professional on 28.04.2019. A perusal of the minutes of the 8th COC reveals the fact that exclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essional, it is seen that the Corporate Insolvency Resolution Process (CIR Process) was initiated against the Corporate Debtor on 13.07.2018 whereby Mr. T. V. Subramanian was appointed initially as the Interim Resolution Professional who was subsequently replaced by this Authority on 19.07.2018 with one Mr. Premachandran. 3. Consequent to the public announcement under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulations, 2016, claims from the creditors seem to have been received by the Resolution Professional. After verification of the claims received, the Interim Resolution Professional constituted Committee of Creditors (COCs) on 18.08.2018. 4. It is evident from Form H that the 1 st meeting of the COC was held on 23.08.2018 and Mr. Sundaresan Nagarajan had been appointed as Resolution Professional on 20.09.2018. It is also evident on perusal of the Form H that the Expression of Interests (in short, Eol ) were issued thrice with the last one having been issued on 17.04.2019. At the instance of the COC, on 28.04.2019 the final list of eligible prospective Resolution Applicants were a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FC-Home Buyers 53.26% Voted For-43.71% Dissented -7.01 % Abstained-2.54% The pattern of voting in relation to the Resolution Plan has also been disclosed as evident from the above table extracted from Form-H. 8. Pursuant to the Regulation 35A of the IBBI (IRP for Corporate Persons) Regulations, 2016, it is disclosed in Form-H that the Resolution Professional has determined the transaction of the nature covered under Sections 43, 45, 50 or 66 of I B Code, 2016 and that suitable Application has also been filed before this Tribunal, which is pending adjudication. 9. Form H Compliance Certificate as issued by the Resolution Professional in terms of I B Code, 2016 read with the attendant Regulations discloses that the Resolution Plan complies with all the provisions of the I B Code, 2016, the CIRP Regulations and does not contravene any of the provisions of the law for the time being in force. 10. It is also brought forth that an Affidavit as required to be submitted by the Resolution Applicant viz., RCC E-Construct Private Limited has also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Security Interest Sunshine Tiruvallur 2,21,697 260 110 150 Dreamz Tiruvallur 88,066 144 122 22 Innova Mangadu 2,39,790 236 183 53 Matrix Potheri 2,90,932 324 163 161 Icon Maraimalai Nagar 63,948 76 76 - Total 9,04,433 1,040 654 386 (iii) The Information Memorandum discloses that the Promoters of the Corporate Debtor whose details are given above were not co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Banks and similar entities having Asset Under Management (AUM) of INR 100 Crores as on 31st March 2018 or later: 3. Any P dot G homeowners association(s) in association with any construction company or LLP or Partnership Firm having net worth of not less than ₹ 10 Lac for the year ended 31st March 2018 or later as per the audited financial statements. 4. In case of resolution plan for each of the projects on a stand alone basis for one or more projects then the resolution applicant shall be required to mention the contribution towards the company's liabilities including the liabilities of the creditors and shall be required to enter into a consortium arrangement with other resolution applicants, to come up with a composite resolution plan for the company as a whole. The aggregated composite resolution plan alone shall qualify for further assessment as per evaluation matrix 15. Based on the Information Memorandum, eligibility criteria and invitation for EoI , the following Resolution Applicants including the successful Resolution Applicant had evinced interest in resolving the insolvency of the Corporate Debtor by submitting Eols and the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 5 Icon 0 10 6 Upfront Payment to Lenders 0 0 7 Aggregate NPV 150 100 8 Funding Arrangement 100 0 9 Commitment to Pay Operational Creditor 0 0 10 Commitment to Settle Other Creditors 0 0 11 Commitment to Settle Employees 50 20 Total 480 435 17. Since the Resolution Plan submitted by the successful Resolution Applicant scored more value, the same was placed before the COC for voting which was ultimately approved b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim amount. Aggrieved by the said proposal, the applicants have filed the present MA. (ii) MA/878/2019 - (Themes Adz) The Applicant is an Operational Creditor who had rendered services of publishing advertisement for the Corporate Debtor and filed their claims with the RP and which have been accepted. As per the Resolution Plan, being the Liquidation value is NIL, the Resolution Applicant proposes to pay the Operational Creditors herein 1.5% of the admitted claim amount. Aggrieved by the said proposal, the applicants have filed the present MA. (iii) MA/879/2019 - (S. Rani) The Applicant is an Operational Creditor who had rendered services of publishing advertisement for the Corporate Debtor and filed their claims with the RP and which have been accepted. As per the Resolution Plan, being the Liquidation value is NIL, the Resolution Applicant proposes to pay the Operational Creditors herein 1.5% of the admitted claim amount. Aggrieved by the said proposal, the applicants have filed the present MA. (iv) MA/625/2019 - (Sai Enterprises) The Applicant viz. Sai Enterprises, supplied building materials to the CD. Upon init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing settled, which is nothing but unjust enrichment. Hence prayed not to approve the Resolution Plan. (vi) MA/629/2019 - (Sai Trading Interiors) Same facts as stated in MA/625/2019, and in addition being unsuccessful in filing the Resolution Plan, sought relief to declare the resolution made during the 8th COC, dropping the applicant from the final list of prospective resolution applicants as illegal, unjust and unconstitutional and to direct the RP to treat the applicant on par with the financial creditor in settlement of the claim. (vii) MA/630/2019 - (B. Akhilandeswari) The Applicant viz. B. Akhilandeswari, is a work contractor and she was engaged by the Corporate Debtor in the project Dreamz . The RP has admitted the Claim of the Applicant to the tune of ₹ 1,54,12,142/-. As per the Resolution Plan, being the Liquidation value is NIL the Resolution Applicant proposes to pay the Operational Creditors 1.5% of the admitted claim amount. Aggrieved by the said proposal, the applicant has filed the present MA. (viii) MA/798/2019 - (13M concrete) This application has been filed by the Applicant viz. IJ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The applicant is a land broker and arranged land to the Corporate Debtor for construction of flats and entered into three different agreements with the Corporate Debtor for payment of land Brokerage Commission. The applicant claims to be a Financial Creditor, submitted a claim to the tune of ₹ 60,87,045 to the RP on 14.12.2018, however it was rejected. Aggrieved by the same, the present MA has been filed. (xii) MA/627/2019 - (S.R. Mahendran) The applicant is a home buyer in one of the projects of the Corporate Debtor viz. Innova . The Applicant submitted a claim to the Resolution Professional for a sum of ₹ 21,15,915/- and the Resolution Professional admitted the claim only to the extent of ₹ 3,85,608/-. Aggrieved by the same, the present MA has been filed. (xiii) MA/436/2019 - (Mrs. Manjula) The applicant is a home buyer in one of the projects of the Corporate Debtor viz. Innova . The Applicant submitted a claim to the Resolution Professional for a sum of ₹ 19,03,780/- and the Resolution Professional admitted the claim only to the extent of ₹ 11,26,113/-. Aggrieved by the same, the present MA has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to which the approval is sought for. 21. ANALYSIS OF THE RESOLUTION PLAN - MA/554/2019 21.1. This Tribunal is duty bound to examine the Resolution Plan within the contours of Section 30(2) of the IBC, 2016. A comparison vis- -vis with the Mandatory compliance under the IBC and the Compliance made under the Resolution Plan is captured hereunder; MANDATORY COMPLIANCE UNDER IBC CODE AND REGULATIONS COMPLIANCE UNDER RESOLUTION PLAN S. 30(1) - Resolution Applicant to submit an affidavit stating that he is eligible under Sec.29A of the code, 2016 The Affidavit of the Resolution Applicant (RA) is placed on record and the RP in Form H has certified that the RA has submitted an affidavit and the said affidavit is in order. S. 30(2)(a) - Payment of Insolvency and Resolution cost in the manner specified by the Board Form H has stated that 4.2 and 4.10 of the Resolution Plan satisfies this condition, The CIRP Cost is arrived at ₹ 1.5 Crores as stated in Annexure - 2A at page 182. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me; and e) the Resolution applicant has the capability to implement the Resolution Plan. Clause 3.7 provides for Implementation and Supervision of the Plan Reg. 38(3) - Resolution Plan shall demonstrate: a) it address the cause of default b) it is feasible and viable c) it has provisions for effective implementation d) it has provisions for approval required and the timeline for the same e) the resolution applicant has the capability to implement the resolution plan Clause 3.5 of the Resolution Plan address the default as multiple preferential, undervalued and fraudulent transactions, also the books of accounts have not been maintained in proper manner for last 3 to 5 years. Infusion of funds from various stakeholders might not have been adequately invested in the assets of the Corporate Debtor. Clause 3.6 states about Source of Funds Clause 2.11 (d) has provisions for approvals required and timeline for the same. S. 30(2)(e) - Does not contravene any of the provisions of the law for the time being in force In Clause 2.6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d their claim as home buyer and they are being paid 42.5% in the following manner; a. The Resolution Applicant proposes to construct and sell of the flats in Project Dreamz (over which there are agreements to sale in favour of Arthveda) to third parties and no - objection will be granted by Arthaveda to the Resolution Applicant within 15 days. b. when Resolution Applicant finds buyers, the unit will be sold to the prospective buyer and the agreement to sale for such unit stands cancelled for Arthveda. Against cancellation and registration of sale deed in favour of prospective buyer, the Resolution Applicant shall pay to Arthveda 42.5% of purchase price (i.e. 42.5% of ₹ 2300/- per sq.ft.) Secured Financial Creditors viz. DMI Finance and Arthveda Star Fund, are being paid on the principal of pay when able as determined by the RA, but not later than 60 months. (ii) Unsecured Financial Creditors - Sanchit Sales and SSP Industries It is stated in the Resolution Plan that Sanchit Sales and S.S.P. Industries, the facilities were provided against a particular project i.e. Panchvarna Project. The list of assets of the CD as provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall cancel the sale of unit and UDS and refund 42.5% of the amount paid against such unit. e. Project wise delivery period: (Pg. 181) Dreamz -12 months from Effective date Icon - 18 months from Effective date Sunshine - Two Block within 12 months Another two blocks no home buyers, so 60 months from effective date Innova - Within 6 months to 24 months Matrix - Four Blocks Within 12 to 30 months Another two blocks no home buyers, so 60 months from effective date f. Any deviation in actual construction, such corrections shall be carried out without any refund to Home Buyers. g. The Resolution Applicant is entitled to change the specification, allocation of car parking or delay the delivery of the same without any further consent /no objection from any Home Buyer. h. UDS of persons mentioned in Annexure 4A and Annexure 14 are required to be reversed. i. Multiple claim against on unit:- Those persons will be paid 20% of the admitted principal amount, however during course of hearing Resolution Applicant has agreed to pay 30% of the admitted principal amount and filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 Refund to Arthveda 127.5 128 Financial Creditors 0 1000 700 200 875 47 2822 Total 3202 III. CONCESSION AND RELIEFS SOUGHT FOR: The detailed list of Concessions and Reliefs as sought by the Resolution Applicant are found in Chapter 7 of the Resolution Plan. However, for the sake of brevity, only certain points are extracted hereunder: (i) Revenue Department and other Authorities to grant relief /waiver from payment of stamp duty inter alia joint development agreement, increase in authorized share capital, etc. (ii) Income Tax Department to gran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Applicant, in the Resolution Plan has proposed to pay only 1.5% of their admitted claim. It has been further contended by the Ld. Counsels for the Applicants that they are also liable for its creditors for the goods supplied /services rendered to it and if such a haircut is approved then it would cause an irreparable loss not only to the Applicant but also to its creditors. In support of their contention, reliance was placed upon the Judgment rendered by the Hon'ble NCLAT in Binani Industries, SREI Equipment Finance Limited in Company Appeal (AT)(InsoIvency)No. 82 of 2018. 22.3. The Ld. Counsel for the Resolution Professional contended that the liquidation value, taking into consideration the water fall process under section 53 of the IBC, 2016, due to the Operational Creditors is NIL and therefore the allocation of amount to the extent of 1.5% of the claim is therefore fully in accordance with Sec. 30(2) of the Code. The allocation of 1.5% of the admitted sum payable to Operational Creditor has been made taking into account, the claims of the priority stakeholders, particularly Home Buyers, whose protection of interest, has repeatedly been affirmed and reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to how it has dealt with the interests of operational creditors, which is not the same thing as saying that they must be paid the same amount of their debt proportionately. Also, the fact that the operational creditors are given priority in payment over all financial creditors does not lead to the conclusion that such payment must necessarily be the same recovery percentage as financial creditors. So long as the provisions of the Code and the Regulations have been met, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors. 57. ......Quite clearly, secured and unsecured financial creditors are differentiated when it comes to amounts to be paid under a resolution plan, together with what dissenting secured or unsecured financial creditors are to be paid. And, most importantly, operational creditors are separately viewed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Operational Creditor has further contended that the profit to be earned by the Resolution Applicant is 89 Crores, whereby only 1.5% of the dues of OC's are being settled, which is nothing but unjust enrichment and under these circumstances, it was prayed not to approve the Resolution Plan. 22.7. In relation to the MA/629/2019, it was contended by the Ld. Counsel for the Applicant that they had submitted a Resolution Plan before the Committee of Creditors and suddenly during the 8 th COC, the Applicant was dropped from the final list of prospective resolution applicants and being unsuccessful in filing the Resolution Plan, the Applicant has sought relief to declare the resolution made during the 8th COC, dropping the applicant from the final list of prospective resolution applicants as illegal, unjust and unconstitutional and to direct the RP to treat the applicant on par with the financial creditor in settlement of the claim. 22.8. The Ld. Counsel for the Resolution Professional in reply contended that it is the Committee of Creditors who refused to consider the proposal of dropping the Applicant from the prospective list of Resolution Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to in sub-regulation (10) may be made with supporting documents within five days from the date of issue of the provisional list. (12) On considering the objections received under sub- regulation (11), the resolution professional shall issue the final list of prospective resolution applicants within ten days of the last date for receipt of objections, to the committee. Thus, a conjoint reading of Section 25(2)(h) of the IBC, 2016 with Regulation 36A (10), (11) and (12) would posit the fact that objections to inclusion or exclusion of a prospective resolution applicant in the provisional list referred to in sub-regulation (10) can be made with supporting documents within five days from the date of issue of the provisional list. In the present case, the intended prospective resolution applicant viz. Sai Trading and Interiors has expressed their interest by way of an email to the Resolution Professional on 17.04.2019 and his name was included in the provisional list of resolution applicant released by the Resolution Professional on 23.04.2019, however his name was left out from the final list of prospective resolution applicant released by the Resolution Profess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall comprise of only four of the parties in the provisional list except M/S. Sai trading and Interiors . 22.10. Thus, a perusal of the minutes of the 8th COC reveals the fact that exclusion of M/S. Sai Trading and Interiors from the prospective list of resolution applicant was deliberated upon by the COC in its 8th COC meeting dated 28.04.2019 and the COC and the Home buyers had serious doubts as to the capability, competence, quality, bonafide and financial soundness of M/S. Sai Trading and Interiors and upon detailed discussions made thereunder, it was finally resolved to exclude M/S. Sai Trading and Interiors from the prospective list of resolution applicant and moreover, as per Regulation 36A (11) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the COC is empowered to include or exclude any person from the prospective resolution applicant as discussed supra. 22.11. In this context, it is also relevant to refer to the Judgment of the Hon'ble Supreme Court in ArcelorMittaI India Private Limited -Vs- Satish Kumar Gupta (2019) 2 SCC 1, wherein the Supreme Court in para 75 and 76 has held as follows; 75. What has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as agreed pursuant to the investment the CD will allot flats and vacant land which were to be held as collaterals by the Applicant. After the initiation of the CIR Process, the Applicant on 03.12.2018 submitted claim to the tune of ₹ 4,58,03,649/- with principal amount of ₹ 1,41,00,000/-. There was no reply from the Resolution Professional in spite of reminded mails from the Applicant. However, the Resolution Professional has requested the Applicant to attend the 5th COC meeting. In the said COC an agenda to reconstitute the COC was taken up, but the members of the COC vehemently opposed to the inclusion of the Applicant in the COC and the Resolution Professional requested the Applicant to abstain from attending further proceedings. On 04.04.2019, an official e-mail from RP was sent to the Applicant and the SSP Industries that their claim was accepted. Thereafter, the Resolution Applicant has submitted the Resolution Plan and upon perusal of the said plan, the Applicant came to know that the Resolution Plan has proposed 100% haircut to the Applicant. The claim of the Applicant has been admitted to the tune of ₹ 1,33,00,000/-. Hence the Applicant has sought for dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No 6 Does the creditor hold a charge registered under the Companies Act, 2013 No Yes Yes No 7 Position under Section 1) waterfall - vide Section 30(5) of Code (b)(ii) (b)(ii) (d) 8 Grouping done in Resolution Plan based on the nature of differing Security Interest . Home Buyers with deemed security interest Secured Financial Creditors with higher /better Security Interest Unsecured Financial Creditor without Security Interest 23.3. Upon the rationale adopted by the Resolution Applicant, Counsel for the Resolution Professional contended that Security Interest as defined under the IBC, 2016 is of the widest amplitude and given the special situation of the Corporate Debtor being in the field of Real Estate development, a broader definition of Secured Creditor and Security Interest a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as requested for a refund earlier, his flat was sold to a third party, who has also lodged a claim. 24.3. The Ld. Counsel for the Resolution Professional contended that Applicant has not filed the claim within the period stipulated and the period provided for submission of claim and verification is already over and hence the Resolution Professional could not entertain his claim. However, the Ld. Counsel for the Resolution Professional referred to Clause 4.4 (xv) of the Resolution Plan, wherein a 60 days window has been provided after approval of the Resolution Plan, so that similar home buyers who had failed to file their claim could do so and they will be considered by the Resolution Applicant. 24.4. Taking into consideration the said representation and also in view of the fact that the Applicant has failed to lodge his claim before the Resolution Professional within the prescribed time period and also no proper claim form was being lodged before the Resolution Professional even after the prescribed time limit, we are constrained to dismiss MA/659/2019. Eventhough the Supreme Court in Essar Steels (supra) has held that a successful resolution applicant cannot s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to MA/436/2019, against the claim lodged for a sum of ₹ 19,03,780/- only a sum of ₹ 11,26,113/- was admitted. The Ld. Counsel for the Applicants contended that the claims of the Applicants ought to have been admitted in full by the Resolution Professional since they have obtained No due certificate from the Corporate Debtor and the decision of the Resolution Professional in rejecting the claim of the Applicants is not justifiable. 24.8. The Ld. Counsel for the Resolution Professional submitted that the applicant as a part of the claim had provided proofs which were mutually inconsistent and not in accordance with law and further the applicant had failed to furnish proper and complete proof for the entire claim amount in accordance with Regulation 8A and therefore the claim of the applicant has been accepted only to an extent wherein the market value as mentioned in the Registered Sale Deed together with the notional compensation amount thereupon. It has also been contended by the Ld. Counsel for the Resolution Professional that a document styled as No dues Certificate has been provided by the Corporate Debtor to the Applicant, stating that a spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Home Buyer allottees who meet the laid down criteria would be disadvantaged making it inequitable and contrary to the perfect legal title they had acquired. 25.3. Further, it has been submitted that the Duplicate Claims arising out of the said double booking the category into which this Applicants fell, is a distinct and separate category and given the unsecured nature of the financial claim, the claimants herein forming this category cannot be equated to Home Buyers having a proper right, title and interest. 25.4. The allocation of 20% of the admitted sum payable to this category of claimants to which the Applicants belong, has been made taking into account, the claims of the priority stakeholders, particularly Home Buyers, whose protection of interest, has consistently been affirmed and reiterated by both the Hon'ble NCLAT and Hon'ble Supreme Court, including the one in Pioneer Urban Land Infrastructure Anr -Vs- Union of India Ors. in W.P. (Civil) No. 43 of 2019. 25.5. Thus, the rationale adopted by the Resolution Professional is reasonable, just and fair and we find no fault with the decision of the Resolution Professional in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for the Financial Year 2016 - 17 and 2017 - 18 in accordance with section 139 of the Income Tax Act, 1961 and in para 7.13 of the Resolution Plan it has sought to carry forward the loss for set off in the subsequent years. The Ld. Counsel for the Income Tax strenuously contended that as per Section 119 of the Income Tax, Act, 1961, any waiver, relief or condonation of delay in filing of returns should be sought before the concerned Income Tax Authority by way of a proper Application and by stating reasons for seeking such waiver. 26.4. The Ld. Counsel for the Resolution Professional in reply submitted that in so far as the failure to file income tax returns by the Corporate Debtor for all prior periods is beyond the scope and control of the Resolution Applicant. It was further submitted by the Ld. Counsel for the Resolution Professional that the Resolution Applicant undertook to file the returns upon approval of the Resolution Plan. 26.5. The Resolution Applicant has filed a reply to the objections filed by the Income Tax, wherein it was pertinently stated that the present Resolution Plan had been prepared by the Resolution Applicant considering that the reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled upon to consider the resolution plan under Section 30(4) of the I B Code after it is verified and vetted by the resolution professional as being compliant with all the statutory requirements specified in Section 30(2). 62. ........ln the present case, however, we are concerned with the provisions of I B Code dealing with the resolution process. The dispensation provided in the I B Code is entirely different. In terms of Section 30 of the I B Code, the decision is taken collectively after due negotiations between the financial creditors who are constituents of the COC and they express their opinion on the proposed resolution plan in the form of votes, as per their voting share. In the meeting of the COC, the proposed resolution plan is placed for discussion and after full interaction in the presence of all concerned and the Resolution Professional, the constituents of the COC finally proceed to exercise their option (business/commercial decision) to approve or not to approve the proposed resolution plan. In such a case, non- recording of reasons would not per-se vitiate the collective decision of the financial creditors. The legislature has not envisaged challenge to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities for construction of houses. The land has been given to them by the authorities on a concessional basis by making payment of 10% amount at the time of allotment. The builders have to be accountable to public/home buyers as well as the authorities and bankers. It is a matter relating to housing needs dealing with shelter place, such an activity is of the public importance as the real estate sector plays a pivotal role in the fulfilment of needs of housing infrastructure. 73. The public trust doctrine imposes on the State and its functionaries a mandate to take affirmative action for effective management, and the citizens are empowered to question its ineffectiveness. The land of the farmers had been acquired for the purpose of housing and infrastructure needs by the State Government and handed over to the concerned authorities for construction. They are bound to ensure that builders act in accordance with the objective behind the acquisition of land and the conditions on which allotment had been made. It was a duty of concerned officials; they are not only enjoined to ensure that the rights of the home buyers are protected but also the interests of the authorities; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepting such increase in the price and thereby the Home Buyers have taken a 'commercial decision' in and by which they are eager to take possession of their flats. Further, the Division Bench - II of this Tribunal in the matter of Orchid Pharma Limited in MA/579/2019 dated 27.06.2019 has held in para 7 that there is no mandate under the Code saying that the Resolution Plan value shall always be more than the liquidation value of the Corporate Debtor. 27.5. The Hon ble Supreme Court in Pioneer Urban Land Infrastructure Anr. -Vs- Union of India Ors. in W.P. (Civil) No. 43 of 2019 has also discussed about the paramount importance of the Home Buyers in the Real Estate business and how their interest have to be safeguarded; 18. It can be seen that the Insolvency Law Committee found, as a matter of fact, that delay in completion of flats/apartments has become a common phenomenon, and that amounts raised from home buyers contributes significantly to the financing of the construction of such flats/apartments. This being the case, it was important, therefore, to clarify that home buyers are treated as financial creditors so that they can trigger the Cod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, the Resolution professional has made a prayer in MA/554/2019 to appoint a Monitoring Committee consisting of a representative each from Successful Resolution Applicant, the Home Buyers represented by one each from seven associations and other Financial Creditors and chaired by the Resolution Professional for a period of 3 months from date of approval of the Resolution Plan by this Adjudicating Authority. In relation to the same, this Adjudicating Authority hereby appoints the following person in the Monitoring Committee; a. The Resolution Professional b. Two representative from the successful Resolution Applicant c. Home Buyers represented by two each from every projects and in relation to participation in the meetings and voting thereat by the two representative of each of the project, it shall be confined only to the discussion and decision concerning respective project and not otherwise. 27.8. Thus the Resolution Plan is hereby approved and is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the Moratorium imposed under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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