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TMI Blog2021 (6) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... t the resolution plan submitted by M/s Alpha Corp Development Private Limited being violative of section 30 of the Code and direct the said resolution applicant to revise the said resolution plan; b. Direct the resolution professional to consider and place all the resolution plans received till date for the consideration of CoC. 2. The Brief facts as enumerated in the application are as follows: a. The applicants are homebuyers/financial creditors of the corporate debtor (CD). CIR Process initiated against the CD on 06.06.2018. One resolution plan was received from M/s Alpha Corp Development Private Limited ('Alpha') and revised plan for four projects namely, Earth Copia, Earth Iconic, Earth Sapphire Court and Earth Tech One was submitted by Alpha on 15.10.2019. However, subsequently Alpha informed that resolution plan is only for three projects and for the fourth Project, namely Earth Iconic it will submit separately in the CIR process of M/s Celestial Estates Pvt. Ltd. The plan was put before the CoC on 11.11.2019 and same was put for e-voting. b. It is submitted that the said resolution plan did not comply with the mandate of section 30 of the Code and the plan was put fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , even before the RA makes its own minimal committed contribution of just Rs. 5 crores in the first year. Handing over/transferring assets worth over Rs. 1000 crores virtually belonging to the thousands of the allottees/homebuyers to a newly formed SPV or even M/s Alpha Corp is fraught with grave dangers of these being mis-appropriated and misused or even swindled in a fraudulent manner. vii. No known property is being transferred to the Corporate Debtor, EIL. It will be entitled to only such properties as would be detected only after the Effective Date (date of order of NCLT). The probability of such a detection is virtually NIL. {Sub-para 2.2 under Para 2 captioned as Object & Scope of 'Proposed Scheme for Allottees') viii. No asset worth any value has been left for the proposed new company of EIL in which allottees would be shareholders. In fact, all liabilities, complexities, problematic issues etc. have been assigned to EIL. Cash flows resulting from payments by the allottees and the agreed contribution of the RA only have been proposed to be routed through the Escrow Account. All other cash Inflows including the value of Aurochem lands, sale proceeds of unso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith 100% voting in favour as per section 25A (3- A) of IBC, hence, the applicants should not be allowed to challenge the resolution plan as resolution plan's approval/non-approval is the commercial wisdom of CoC. Furthermore, no ground has been taken by the applicant to indicate that the resolution plan is contravening any of the provisions of the Code. Moreover, the applicants have a total voting share of less than 1 percent. It is stated that the applicants have got sufficient time to analyze the resolution plan as the plan was presented before the members of the CoC in the 18th meeting dated 18.10.2019 same was discussed in detail. The authorized representative also conducted the meeting between the allottees and Resolution Applicant on 08.11.2019 and in the said meeting it was decided that certain changes may be carried out in the resolution plan and the resolution plan was amended on the changes suggested. Hence, the resolution professional prayed that the application may be rejected keeping in view the above facts. 4. The applicant also filed the rejoinder to the reply of the resolution professional and submitted that resolution plan of M/s Alpha Corp contravenes the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsels for both the petitioner and the respondents at length, perused the evidence placed on record, including the written submissions filed by both of them. It is seen that the present IA has been filed by 14 applicants. The counsel for RP has been able to prove that effectively (after excluding the applicants under joint names and those being not FC) there are only 7 applicants who had opposed to the approval of Resolution Plan, and this constitutes a miniscule proportion of the total number of FCs in class. This has not been controverted by the Counsel for Applicants herein. It is also seen that the Resolution Plan has been approved by 99.97 % of voting share of CoC. On this count we agree with submission of Counsel for RP that the applicants herein do not have locus standi to file the instant application. Nevertheless, we will deal with other objections of the Applicants and reply of RP to the same. 8. Next objection by the Applicants herein states that the Resolution Plan does not provide for an exit route for the dissenting home-buyer financial creditors. To this the counsel for RP has submitted that 7 applicants who have not voted in favour of the Plan is of no consequence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Plan of Resolution Applicant was received on 15.10.2019, which is within the time frame fixed by CoC in the RFRP. However, the plan as received can always be subject to negotiations between RA and the CoC in the best commercial wisdom of CoC. Therefore, the contention of Applicant on this count, being devoid of merit, is rejected. 11. To sum up, due to the reasons enumerated in Para 7 to 10 above, the IA as filed by Applicants, being devoid of merits, is hereby rejected. No orders as to costs. IA-05/2020 12. The Resolution Professional has filed the instant application under section 30(6) and 31(1) of Insolvency and Bankruptcy Code, 2016 (hereinafter referred as "IBC") r/w Regulation 39 (4) of the Insolvency and Bankruptcy board of India (Insolvency Resolution Process for Corporate Persons) Regulations (hereinafter referred as "IBBI (CIRP) Regulations, 2016), for seeking approval of Resolution Plan under section 31(1) of IBC in the matter of Earth Infrastructure Limited (hereinafter referred as "Corporate Debtor") for the remaining projects i.e., EarthCopia Project, Earth Iconic Project, Earth Sapphire Project and Earth Techone Project. However, it can be seen from the recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the resolution plan for the whole company. Accordingly, the Form G was published on 22.05.2019. Pursuant to that three prospective resolution applicants namely, BPT Infra Projects Private Limited, Roma Unicon Designex Consortium ('RUD') and the Alpha Corp Development Private Limited filed the resolution plan. The plan of BPT Infra Projects Private Limited was rejected by CoC in terms of Regulation 39(1A) as the resolution plan was not as per conditions and also contravened the law for the time being in force and was running in 5 pages, furthermore, earnest money was not deposited. RUD submitted its resolution plan for Earth Towne Project only and same is approved by this authority vide order dated 05.04.2021 in CA-751/2019 in IB-401(ND)/2017. 16. It is submitted that the resolution plan along with the scheme submitted by the Alpha has been approved by the CoC by thumping majority of 99.97% in 19th CoC meeting dated 11.11.2019. There is summary of resolution plan provided by the Applicant in its application, which is as follows: Priority No. Head Amount (Rs.) 1. CIRP Cost (Approx.) 20,00,000/- up-to maximum, 50,00,000/- 2. Workmen dues Workmen as per section 2(s) of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functional head. Earth Sapphire Court Project i. The Resolution Applicant proposes that the Earth Sapphire Court Project be transferred to the Project SPV in such a manner such that all necessary assets, rights, approval, consent, licenses whether of EIL, Nishtha and/or the Earth Sapphire Court Project be provided to the Project SPV to enable it to revive and construct the said Earth Sapphire Court Project with the intention to safeguard all its stakeholders and most importantly deliver the units to the Allottees and register transfer of the said units in their favour without any legal hindrance without the Resolution Applicant having to assume the excluded liabilities of EIL, Nishtha and/or the Earth Sapphire Court Project specifically in terms of this Resolution Plan. Such may be achieved either through a merger process whereby the Earth Sapphire Court Project and/or Nishtha is merged into the Project SPV through a tribunal governed scheme of arrangement or through a contractual transfer of the Earth Sapphire Court Project and/or Nishtha, in each case assuming that liabilities in this regard shall only transferred to the resolution applicant and/or project SPV, as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Earth TechOne Project SPV and Mr. Vikas Manhas shall be the organisational manager and functional head. Objection by HDFC Bank 18. It is submitted that the HDFC Bank ('objector') is a secured financial creditor having a claim of Rs. 44,88,712/- against the CD, which has been accepted by the RP. The RA has offered only 4,00,000/- to objector in its resolution plan which has been rejected by the objector. The RA has given no rationale on which the objector has been discriminated as other Financial Creditors are getting 100% of their debt unlike the objector, which is getting 35% only. The objector has rejected the resolution plan submitted by the RA, therefore, it is entitled to claim amount in terms of section 30(2)(b)(ii) of Code, which should not be less than the amount to be paid to such creditors, which it would have been entitled to under section 53(1) of the Code. Hence, prayed that the resolution applicant may be directed to ascertain the amount in terms of section 53(1) of the Code that is to be paid to the HDFC Bank being dissenting secured creditor and the time line within which said amount shall be paid to the bank. 19. RA/Alpha has filed an affidavit in respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be made to HDFC by the RA (Rs.4,00,000/-) together with RUD (Rs. 12,56,839/-) which amounts to 16,56,839/-, is more than the amount which would have been payable to it in the event of liquidation. 20. We have perused the objection raised by the HDFC Bank and Reply of the RA to the objection. All the objections raised by the HDFC Bank are satisfactorily replied by the RA in detail including the amount to be paid in the resolution plan and regarding the priority in payment, therefore, it seems no direction is required to be given to RA. Hence, the objection raised by the HDFC stands rejected in the aforesaid facts and circumstances. 21. The summary of the Resolution plan submitted by the Resolution Applicant as per Form H is as follows: #Amount provided over time under the Resolution Plan and includes estimated value of non-cash components. It is not NPV. **the balance share for remaining four projects (after considering 28% as share of Towne Project from Earth Infrastructure limited as per resolution plan for Towne Project. 22. It is submitted that as per the terms of the request for resolution plan ("RFRP") the successful Resolution Applicant was to submit an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; Regulation 38(2)(c) of IBBI (Insolvency Process for Corporate Persons) Regulations, 2016 Clause 7 of Part IV of the resolution Plan provides for the payment of the debts of operational creditors. Adequate means for supervising the resolution plan implementation has been provided in Clause O Part IV of the Resolution Plan. Section 30(2)(d) of the IBC, 2016 And Regulation 38(2) of IBBI (Insolvency Process for Corporate Persons) Regulations, 2016 Clause 8 of Part III(A), Clause 10 of Part III(C) clause 11 of Part of III(C), Clause 10 of Part III(W) and clause O of Part IV provides for the management of the affairs of the corporate debtor. The implementation of plan as stated by the Resolution Applicant in the Resolution Plan is 5 Years from the plan approval date Section 30(2)(e) of the IBC, 2016 The Resolution Plan does not contravene any of the provisions of law for the time being in force as declared in clause 7 of Part IA of the Resolution Plan. Section 30(4) of the IBC, 2016 Resolution Plan is approved by 99.97% voting in favour in 19th CoC meeting 26. Thus, the resolution plan filed with the Application meets the requirements of section 30 and 31 of IB ..... X X X X Extracts X X X X X X X X Extracts X X X X
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