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TMI Blog2021 (11) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the purported settlement plan submits that the Company requests to all the Stakeholders of the Company and the Project, to approve the aforesaid revival plan and allow the Management/Promoter to restart the construction. There are the following major reasons to approve the Revival Plan in the best interest of the Project and the Company: a) The existing management is fully aware of the Project; in case there is a change in the management, the new management will take time to understand the various aspects of the Project. b) The CIRP process will only delay and proposed revival plan. However, the existing management will complete the Project within 15 months. c) The CIRP process will additionally burden the Project with additional costs. d) There is no clarity on who will bid for the Project and what will be offered. e) The management has agreed to hand over the Project in a time-bound manner and without any additional cost burden to the Buyer. f) The existing management will provide an approach road before completion of the Project. g) The Promoters has agreed to provide Personal and Corporate Guarantee for taking finance for the Project and mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Application IA No. 1115 of 2020 for modification of the order dated 26th February 2020. 2. The sequence of events clarifying the development during the Appeal is given in the form of a chart, which is as under: 17th December 2019 CA/AT/1507 of 2019 filed against the order of the Adjudicating Authority dated 22nd November 2019 The learned Adjudicating Authority has admitted the petition filed under Section 7 of the code by the impugned order. 19th December 2019 The interim stay order was passed by this Appellate Tribunal restraining the Constitution of Committee of Creditors. 31st January 2020 Based on the submissions of the Appellant that he will be filing settlement terms/plan disclosing all material particulars with regard to the completion of the Project, sources from which the Appellant will be arranging funds for completion of the Project and the time frame within which the possession can be given to the allottees, this Appellate Tribunal provided 15 days with further orders to resume CIRP, if no settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l issued a direction to submit a revised proposed settlement plan within two weeks so that they can decide whether reverse Insolvency Resolution Process will be adopted or CIRP be restored? Appellant had filed the Application IA No. 1115 of 2020 for modification of the order dated 26th February 2020. 3. In this IA, Appellant has stated that it had filed the settlement terms/plan detailing the Plan disclosing all materials particulars with regard to completion of the housing project, so if the Appellant is allowed to work upon his detailed proposal, then all the allottees will get the house. Therefore, in such circumstances, Appellant has settled the matter with Respondent No. 2 and has filed a Settlement Terms/Plan in regard to the completion of the Project. 4. It is further added that if the IRP is allowed to go ahead with the constitution of the Committee of Creditors and carry on the CIRP, then the Appellant, despite having settled the matter with respondent No. 2 and having a plan for completion of the Project, will have to hand over the management of the Project. At present, the Applicant/Appellant has completed about 70-75% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total Area Sold Area Balance Total Unit No. of Unit Sold Balance Unit T 1 92570 92570 0 56 56 0 T 2 90250 90250 0 56 56 0 T 3 110832 110832 0 56 56 0 T 4 110832 110832 0 56 56 0 T 5 129680 121360 8320 54 52 2 T 6 110832 110832 0 56 56 0 T 7 129988 117366 12622 56 52 4 T 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 8 6.16 3.13 9.29 1.452 T 10 10 8 4.72 3.18 7.90 1.452 T 11 10 7 6.50 5.15 11.65 1.450 T 12 10 8 4.36 3.23 7.59 1.450 Common Area cost to be incurred 19.1518 Commercial 6.30 6.30 EWS 1.05 1.05 Total 470 452 118.222 38.926 157.148 52.726 (vi) Proposed Plan The Project i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l consider to refund the same after handing over the possession to the home buyers who want to take the possession of the flat in the Project. Delay Compensation No claims against the previous delays. Delay compensation shall only be paid if there is delay as per the resolution plan implementation as per the Hon'ble Tribunal direction/order. Utilization of customer funds Proposed mechanism The developer shall utilize the funds in the completion of Tower T1-T12 as per the tabular representation above in the following manner: (i) 70% of total collection shall be used for construction till Application of OC. (ii) 30% of total collection shall be used for payment of EMI, Salary and other project related expenses. The proposed mechanism of utilization of funds received from customers is enclosed as Annexure BB Repayment of New Fund Payment of interest of fresh loan shall be made from 30% collection. Repayment of Edelweiss Repayment of Loan to Edelweiss shall be made from the surplus o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce construction work under the Promoter which will be finalized in few days. That in order to more clarity on the funds utilization the Promoter has annexed a plan for the proper utilization of funds and its planning to maximize the uses in order to complete the projects in time as per the Resolution plan. (c) Planning of the Promoter to execute the Project Since in Phase-I of the Project, where 94% area is sold out and 70% of construction is completed, therefore, the Promoter is planning to complete the Phase-I on priority basis. Further, the Promoter wants to star Phase-II of the Project where only 12% of area is sold only after completion of Phase-I or when atleast 75% units will be booked. Since there are only 22 units booked and allotted in Phase-II and the Company has collected only initial booking amount of Rs. 3.67 crores, therefore, the Promoters is planning to either request the customers of Phase-II to wait to restart of the construction or may refund the amount by selling those units to other buyers. (iv) Cost to Complete the Phase-I and Proposed Planning of Funds As per the estimation of the Promoter, balance cost of cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be completed within 6-9 Months. Some Plumbing and Electrical work is done in Tower 1-13, and the remaining Plumbing and Electrical work can be carried out in all the remaining towers, side by side, while completing construction of Tower 8-12. According to discussions with the technical consultants, architects and contractor, the Project of Phase-1 (Tower 1-12) can be completed within the total period of 18 Months, provided the funds flow is continued. This period is extendable by 3 Months for making Application for 'occupancy certificate' and obtaining approvals before delivery of flats. 3. Funds Flow The Applicant has considered 100% inflow of funds at the completion of every stage of construction, which is practically not possible. After analysing that 86 Homebuyers (19%) in Phase-I have not yet submitted their claims, I have observed that the corporate debtor will not get more than 90% of balance dues from Homebuyers, and in case of unsold flats, the corporate debtor will not get more than 60% after sale of flats, until the Project is completely delivered. Keeping in view the above assumptions, I have changed the inflow and usage of funds, as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -T12 and Phase-2, if any. The construction of 'Tower 8-12 is scheduled to commence immediately, and the customers are not concerned with Phase-2, than what is the purpose of this condition. 7. On page 24, under the head 'Customer Cases', there is a condition to withdraw all cases/complaints shall be withdrawn/settled by the Homebuyers immediately. This condition is unfair until the flats are delivered to the homebuyers. 8. The Homebuyers has shown concern on the 'Balance Dues receivable' by the corporate debtor. I have addressed their concern by sharing their information with them/their lawyers. 9. The Homebuyers has a major concern that the approval of Proposed Settlement Plan' will result into 'No action against the Applicant for preferential/undervalued transactions. The funds required to complete the Project should be inducted as 'Reverse of preferential/undervalued transactions'. 5. CONTRACTOR'S CONCERNS:- Indsao Infratech informed that he had discussions with the Applicant and is ready to restart construction immediately. He further requested that as an 'Operational Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and without any additional cost burden to the Buyer. f) The existing management will provide an approach road before completion of the Project. g) The Promoters has agreed to provide Personal and Corporate Guarantee for taking finance for the Project and made the provision and back up to start immediately without wasting any time. 16. It is important to mention that no settlement plan encompassing all the allottees has been filed to date. The allottees of different groups have filed IA 183 of 2020, 184 of 2020 dated 10th January 2020, IA 205 of 2020 dated 13th January 2020, IA 330 of 2020 dated 22nd January 2020, IA 366 of 2020 dated 31st January 2020, IA 560 of 2020 dated 03rd February 2020, IA 738 of 2020 dated 13th February 2020, IA 739 of 2020 dated 13th February 2020 and 756 of 2020 dated 14th February 2020 for Impleadment. Only some of them favour the purported settlement plan, and others oppose the scheme. However, it is undisputed to date there is no consensus among the allottees for the said settlement plan. 17. In its latest status report, Interim Resolution Professional submitted that some homebuyers want that reverse CIRP as a better option becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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