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TMI Blog2024 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted by the Adjudicating Authority, taking the note of the fact that now Flat Buyers Association is desirous to complete the unfinished project. The Appellant dissented with the Resolution Plan. As per Section 30, subsection (2) of the IBC, a dissenting Financial Creditor is entitled for the amount, which shall not be less than the amount, which the dissenting Financial Creditor is entitled in event of liquidation of the Corporate Debtor. The amount is to be distributed in accordance with order of priority provided in sub-section (1) of Section 53. The Resolution Plan, which has been approved by the CoC with 90.45% vote share and through which Resolution Plan the completion of unfinished project is helping in resolution of the CIRP of the Corporate Debtor and in which 97% vote share are being held by the Flat Buyers themselves, the Resolution Plan cannot be set aside at the instance of Appellant, who is being paid the amount as per Section 30, sub-section (2). There are no ground to interfere with the impugned order - The Appeal is dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Mr. Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Abhishek Anand, Mr. Kunal Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Association on 29.07.2019, which was placed before the CoC in its Meeting scheduled to be held on 01.08.2019. The CoC considered the Plan and approved the Resolution Plan submitted by Respondent No.1. (vi) As per the Resolution Plan, value was proposed to be paid to the Appellant was Rs.1,00,00,000/-. An Application was filed by the RP before the Adjudicating Authority for approval of the Plan, which came to be approved by the impugned order dated 28.04.2022. Aggrieved by which order this Appeal has been filed. 3. We have heard Shri Abhishek Anand, learned Counsel appearing for Appellant; Shri Neeraj Kr. Gupta, learned Counsel appearing for Respondent No.1 and Shri Sanjay Kumar Singh, RP has appeared in person. 4. Shri Abhishek Anand, learned Counsel for the Appellant challenging the order contends that Adjudicating Authority committed error in approving the Resolution Plan. The amount proposed to the Appellant under the Resolution Plan is not in accordance with law. The Appellant is not being paid the amount as per the liquidation value of the Appellant. The Appellant being a dissenting Financial Creditor is entitled for payment of amount as per liquidation value. It is submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor was liquidated. It is submitted that the units for which mortgage was made were non-existent units. There was no title document with regard to 30 flats, which have been mortgaged by the Corporate Debtor. It is submitted that insofar as performance security is concerned, this was the discretion of the CoC. The CoC never took a decision to ask for performance security. The Resolution Plan submitted by Respondent No.1 was accepted and was first considered as per the liberty granted by Adjudicating Authority vide order dated 03.07.2019. The Resolution Plan was submitted and accepted by the CoC and approved by more than 90.45% vote share. The Appellant, is being paid the amount, which is what would have been payable in the event of Corporate Debtor is liquidated. There is no ground to interfere with the impugned order passed by the Adjudicating Authority. 7. We have considered the submissions of learned Counsel for the parties and have perused the record. 8. From the facts, which have been brought on record, it is clear that in pursuance of Form-G issued on 20.11.2018, no Resolution Plan was received. The 180 days of CIRP period had come to an end. The RP filed an Applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the corporate debtor; (b) provides for the payment of debts of operational creditors in such manner as may be specified by the Board which shall not be less than- (i) the amount to be paid to such creditors in the event of a liquidation of the corporate debtor under section 53; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1. For removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2. For the purpose of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured flats. Therefore, the argument is bad in law as well as facts and is in argument of prejudice unsupported by facts and law. 11. Now, coming to the submission of the Appellant that performance security has not been asked from the Successful Resolution Applicant, it is clear from the facts as noted above that the Resolution Plan was permitted to be filed by the Flat Buyers Association, in view of the liberty granted by the Adjudicating Authority on 03.07.2019. The CoC has not directed the Flat Buyers Association to submit performance security, as the Flat Buyers themselves constitute 97% of voting share of the CoC, have chosen not to take any performance security, we are of the view that on this ground, the Resolution Plan cannot be faulted with. As noted above, no Resolution Plan was submitted in pursuance to Form-G and Resolution Plan by the Flat Buyers Association submitted only after liberty granted by the Adjudicating Authority on 03.07.2019. The submission that the name of the Successful Resolution Applicant was not included in the Prospective Resolution Applicant, which was prepared after issuance of Form-G, has no merit in the facts of the present case. The facts as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors. Ms Madhavi Divan is correct in her argument that Section 30(2)(b) is in fact a beneficial provision in favour of the operational creditors and dissentient financial creditors as they are now to be paid a certain minimum amount, the minimum in the case of the operational creditors being the higher of the two figures calculated under sub-clauses (i) and (ii) of clause (b), and the minimum in the case of dissentient financial creditor being a minimum amount that was not earlier payable. As a matter of fact, preamendment, secured financial creditors may cramdown unsecured financial creditors who are dissentient, the majority vote of 66% voting to give them nothing or next to nothing for their dues. In the earlier regime it may have been possible to have done this but after the amendment such financial creditors are now to be paid the minimum amount mentioned in sub-section (2). Ms Madhavi Divan is also correct in stating that the order of priority of payment of creditors mentioned in Section 53 is not engrafted in sub-section (2)(b) as amended. Section 53 is only referred to in order that a certain minimum figure be paid to different classes of operational and financial cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DBI), seeking a direction to distribute as per security interest. In paragraph 2, following case of the SIDBI has been noticed: 2. Brief facts of the case giving rise to this Appeal are:- Oriental Bank of Commerce had filed a Section 7 Application under the Insolvency and Bankruptcy Code, 2016 (IBC in short) against the Corporate Debtor M/s. Gupta Exim (India) Pvt. Ltd. which was admitted by the Adjudicating Authority vide Order dated 29th October, 2019. In the Corporate Insolvency Resolution Process in 16th Meeting of Committee of Creditors , Resolution Plans were discussed. Revised Resolution Plans were submitted by the prospective Resolution Applicants. Resolution Plan was put to e-Vote between 07th August, 2021 and 16th August, 2021 and by majority of 97.97%, the Resolution Plan of Lotus Textiles and Mr. Vijayant Mittal was approved. Appellant sent an Objection dated 16th August, 2021 to the distribution to the Appellant under the Resolution Plan. An I.A. No. 581 of 2021 was filed by the Appellant for direction to the Resolution Professional to distribute the proceeds of the Resolution Plan where following prayers were made: 1. The present application may kindly be allowed and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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