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TMI Blog2022 (8) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... horized Representative did not falter in keeping the Homebuyers informed about the CoC meeting and its agenda. It is also noted that Authorized Representative had intended to hold a meeting to elicit preliminary views of the Homebuyers on 12.01.2022 but eventually did not convene it and instead sought the views of Homebuyers on the amended Resolution Plan by e-mail on whether they approved or rejected it. It is pertinent to note that CIRP Regulations 16-A(9) does not appear to make it obligatory to hold the meeting with Homebuyers to seek their preliminary views as the word used in the said Regulation is may , thereby rendering the decision to seek preliminary views optional. This is not to deny the fact that with a view to enable the Authorised Representative to participate effectively in the CoC meeting and properly represent the interests of the homebuyers, holding such a meeting of Homebuyers is eminently desirable. It is also an admitted fact that out of 26 Homebuyers, only 19 Homebuyers voted in the matter and that in terms of Section 25-A(3-A) of the IBC, the Authorized Representative taking cognizance of the fact that 89.80% of Homebuyers voted in favour of the amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed I.A. No. 324/2022 and approved the Resolution Plan of the Corporate Debtor submitted before it by the Resolution Professional under Section 31(1) of the IBC while dismissing IA No. 572/2022 filed by the present Appellants in their capacity as members of Financial Creditors in class of Corporate Debtor challenging the material irregularities committed by the Resolution Professional of the Corporate Debtor and the Authorised Representative of Financial Creditors in class in the Corporate Insolvency Resolution Process ( CIRP in short). Aggrieved by the said impugned order, the instant appeal has been preferred by the Appellant with the prayer that the impugned order be set aside and the Resolution Professional and Authorised Representative be directed to follow the due process of law and place the revised Resolution Plan before the Committee of Creditors( CoC in short) in terms of the provisions of IBC and regulations framed thereunder. 2. The Learned Counsel for the Appellants has also filed I.A. No. 2562 in Company Appeal (AT)(Ins.) No. 906 of 2022 seeking condonation of eleven days in filing this Appeal. The grounds of delay appear to be bonafide, the I.A. is allowed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Plan be remanded to the CoC for fresh reconsideration including the issue of cash infusion by the Resolution Applicant for effective implementation of the Resolution Plan. The Adjudicating Authority further ordered that this exercise to be completed by 18.01.2022 and till then the CIRP period was extended by the Adjudicating Authority. 7. In compliance to these directions, the Resolution Applicant submitted the revised Resolution Plan on 11.01.2022 after adding the clause of initial cash infusion. Pursuant to receipt of the revised Resolution Plan by the Resolution Professional, notice was issued for holding the CoC meeting (8th in series) on 14.01.2022 for approval of the revised Resolution Plan. In turn, the Authorised Representative of Homebuyers issued a notice alongwith the agenda of the CoC meeting to all the Homebuyers for a meeting on 12.01.2022 to seek their preliminary views on the revised Resolution Plan for voting and approval. 8. As per the voting instructions received by the Authorised Representative of the Homebuyers, out of a total of 26 Homebuyers, 19 Homebuyers voted in the matter with 89.80% voting in favour of the amended Resolution Plan. As per above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIRP regulations is mandatory in nature and not directory and in support of his contention has relied upon the judgement of this Tribunal in the matter of Amit Goel versus Piyush Shelters India Private Limited in Company Appeal (AT) (Ins.) No 700 of 2021. The Learned Counsel for the Appellants has further contended that the Resolution Professional also acted in complete contravention of CIRP Regulations 25(5), 25(6), 25-A and 26 which, interalia, provides for voting through electronic means, however, the Authorised Representative on 12.01.2022 sent an email at 3 p.m. informing that there will be no e-voting portal for Homebuyers and that the Homebuyers were to communicate their decision on the revised Resolution Plan by 2 p.m. of 15.01.2022 by email. Thus the conduct of the Respondents No 1 and 3 negated the possibility of any deliberation and discussion on the revised Resolution Plan which was necessary since the Resolution Plan was conditional and discriminatory in nature and by virtue of being non-compliant ought not to have been placed before the CoC for approval and that such an act was contrary to the ratio laid down by this Tribunal in K. L. Jute Products Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are duty bound to act scrupulously in terms of the statutory scheme of the IBC including the practice rules and regulations framed there-under. If procedural rules are bypassed or circumvented by them in a manner which stifles the basic canons of fairness and justice and prejudicially affects the legal rights and entitlements of party, the said action on grounds of having vitiated the process deserves to be set aside. Be that as it may, while it is important to maintain the sanctity and credibility of CIRP proceedings, it is equally important to ensure that hyper-technicality is not allowed to occupy centre-stage and besiege the proceedings as it would end up frustrating and defeating the very object and purpose of IBC. It is against this evaluation parameter that we may now proceed to examine the acts of omission and commission on the part of Respondents No.1 and 3 in the present matter to conclude as to whether there has been any transgression of the bounds of rules and regulations leading to any serious miscarriage of justice suffered by the Appellants. 16. For better understanding, we may have a peep into the statutory scheme of IBC with respect to rights and duties of Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded by the interim resolution professional or resolution professional, as the case may be. Explanation For the purposes of this section, the electronic means shall be such as may be specified. 17. The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation 16-A (9) provides that the Authorized Representative shall circulate the agenda to creditors in a class and may seek their preliminary views on any item in the agenda to enable him to effectively participate in the meeting of the committee ... Regulation 16-A(9) further provides for certain time window to be allowed for Creditors in a class for submission of their preliminary views. 18. In the present case, we find that the Authorised Representative sent an e-mail to the Homebuyers on 10.01.2022 informing them about a meeting of CoC being convened by the Resolution Professional on 13.01.2022 on the directions of the Adjudicating Authority. It is also noted that the same e-mail mentions that a meeting to seek preliminary views of all Homebuyers would be conducted by him on 12.01.2022. This was followed up by another e-mail on 11.01.2022 communicating the agend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and stringent time-frame, the Adjudicating Authority has held that objections raised by the Appellant like the Authorised Representative not holding the meeting scheduled on 12.01.2022 and instead seeking the views on the Resolution Plan by email lacks merit. On the whole, we are of the considered opinion that the procedural compliance by the Resolution Professional and Authorized Representative appears to be reasonably substantial and we find no reason to hold that there was any wilful casualty or miscarriage of justice. 21. We now look at the two judgements of this Tribunal referred to by the Learned Counsel for the Appellants. There is no dispute with regard to these case laws. However, as each case has its own merits, it is necessary to examine the relevance of these case laws against the facts and circumstances of the present case. In the matter of Amit Goel Vs. Piyush Shelters India Private Ltd., the facts are clearly distinguishable, in that the Financial Creditors in class constituted more than 79% of total voting rights in the CoC and there was an issue of unequal treatment meted out to two separate categories within financial creditors in class. Hence, the context bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Learned Counsel for the Respondent that the minority Homebuyers have to necessarily flow with the majority within the class and the decision of Hon ble Supreme Court in Jaypee Kensington Boulevard Apartments Welfare Association and Ors. Vs. NBCC(India) Ltd. and Ors.(2022)1 SCC 401 is indeed fully attracted in the present case. The relevant extracts of this judgement are reproduced below:- xxx xxx xxx 164.4 Having regard to the scheme of IBC, and the law declared by this Court, it is more than clear that once a decision is taken, either to reject or to approve a particular plan, by a vote of more than 50% of the voting share of the financial creditors within a class, the minority of those who vote, as also all others within that class, are bound by that decision. There is absolutely no scope for any particular person standing within that class to suggest any dissention as regards the vote over the resolution plan. It is obvious that if this finality and binding force is not provided to the vote cast by the authorize representative over the resolution plan in accordance with the majority decision of the class he is authorized to represent, a plan or resolution involving l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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