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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 ..... Brief facts of the case necessary to be noticed for deciding this Appeal are: (i) On 17.09.2014, the Appellant extended loan to the Corporate Debtor and executed a Memorandum of Equitable Mortgage dated 17.09.2024, creating first and exclusive mortgage over the properties of Corporate Debtor. The Corporate Debtor created all rights, title, and interest of 30 unsold units in favour of the Appellant. (ii) By order dated 04.05.2018 of the Adjudicating Authority, Corporate Insolvency Resolution Process ("CIRP") commenced against the Corporate Debtor on an Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "IBC") by Daimler Financial Services India Private Limited. (iii) The Appellant filed a claim in the CIRP. The RP admitted the claim of Appellant of Rs.1,86,00,000/-. The Form-G was issued by the RP on 20.11.2018, against which one M/s. Pacificia (India) Projects Private Limited filed an Expression of Interest ("EoI"), but no Resolution Plan was submitted. (iv) The 180 days of CIRP expired on 31.10.2018 and 270 days expired on 29.01.2019. An Application was filed by the RP for exclusion of time. The Adjudicating Author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -G issued on 20.11.2018, although an EoI was received by one M/s. Pacificia (India) Projects Private Limited, but no Resolution Plan was submitted. It is submitted that Application was filed for extension of CRIP period before the Adjudicating Authority wherein it was pleaded that Flat Buyers Association, i.e., Respondent No.1, homebuyers of the project has requested to submit a Plan for completion of the unfinished project. Noticing the aforesaid fact, the Adjudicating Authority vide order dated 03.07.2019, extended the period till 10.08.2019. The Resolution Plan submitted by Respondent No.1 was placed before the CoC, which was approved by 90.45% vote share by the CoC. The Appellant dissented the Resolution Plan. It is submitted that the Appellant is being paid not less than the amount, which would have been payable to the Appellant in event the Corporate Debtor was liquidated. It is submitted that homebuyers itself being Resolution Applicant, no direction was issued for taking performance guarantee from the Resolution Applicant. In the facts of the present case, no ground have been made out to interfere with the approval of the Resolution Plan. The Promoters of the Corporate Debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order dated 03.07.2019, which is relevant is as follows: "Accordingly, we direct that the period of 117 days be excluded from the period of 270 days and if that is done then the process would come to an end on 19.08.2019. The aforesaid course is also necessary to adopt in view of the averments made in para 15 of the application wherein it is asserted that the association of flat buyers has roped in one developer for the purpose of the resolution of the Corporate Debtor company by agreeing to take further monetary hit and pooling in additional funds for the purpose of construction/ completion of the unfinished project. Mr. Sanjay Singh, the resolution professional states that if the applicant bring the resolution applicant before him within next three days then further proceedings before the CoC shall be taken up. The application stands disposed of." 9. It was after the order dated 03.07.2019 that a Resolution Plan was submitted by Resolution Applicant to RP, which has been approved by the CoC in the Meeting dated 01.08.2019 with vote share of 90.45%. The Appellant dissented with the Resolution Plan. As per Section 30, subsection (2) of the IBC, a dissenting Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management of the affairs of the Corporate debtor after approval of the resolution plan; (d) The implementation and supervision of the resolution plan; (e) does not contravene any of the provisions of the law for the time being in force (f) confirms to such other requirements as may be specified by the Board. Explanation. - For the purposes of clause (e), if any approval of shareholders is required under the Companies Act, 2013(18 of 2013) or any other law for the time being in force for the implementation of actions under the resolution plan, such approval shall be deemed to have been given and it shall not be a contravention of that Act or law." 10. The vote share of the Appellant was 2.38% in the CoC and as per the vote share, the amount payable to the Appellant comes to Rs.99,19,425/- as pleaded by RP. We, thus, are of the view that payment in the Plan proposed to the Appellant is not less than the amount, which was payable to the Appellant in event the amount is distributed as per priority under Section 53(1) of the IBC. In paragraph 13 of the reply of Successful Resolution Applicant, following has been pleaded: "13. Compliance of Section 30(2): As already stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmit a Plan. 12. The Appellant's claim was admitted in the CIRP for Rs.1,86,00,000/- and it having vote share of 2.38%, it has been proposed an amount of Rs.1,00,00,000/-, which is more that the amount, which would have been payable to the Appellant in case the amount is paid as per priority under Section 53(1) of the IBC. The learned Counsel for the Appellant submits that the Appellant was entitled for amount as per security value of the Appellant. It having equitable mortgage of 30 units/ flats. It is well settled that the security holder cannot insist payment of amount as per security interest, when there is resolution of the Corporate Debtor through a Resolution Plan. In this context, we may refer to judgment of the Hon'ble Supreme Court in India Resurgence ARC Pvt. Ltd. V. Amit Metaliks & Anr. (2021) SCC OnLine SC 409. In paragraphs 16 and 17 of the judgment, following have been held: "16. The repeated submissions on behalf of the appellant with reference to the value of its security interest neither carry any meaning nor any substance. What the dissenting financial creditor is entitled to is specified in the later part of sub-section (2)(b) of Section 30 of the Code and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essentially the commercial wisdom of the Committee of Creditors; and a dissenting secured creditor like the appellant cannot suggest a higher amount to be paid to it with reference to the value of the security interest." 13. This Tribunal in Company Appeal (AT) (Insolvency) No.405 of 2023 - ICICI Bank Limited vs. BKM Industries Limited, has held that there is no scope of distribution of assets among Financial Creditor as per security interest. In paragraphs 15 and 16 of the judgment, following have been held: "15. When we look into Section 53, sub-section (1) (b), debt owed to a secured creditor has to be distributed equally between and amongst workmen's dues and debts owed to a secured creditors. The debt owed to the secured creditor is a debt as admitted in the CIRP. Admittedly, the claim as submitted by the Appellant was admitted in the CIRP and debt owed to Appellant is as per admitted claim. The distribution of the debt has to be as per the debt of the Financial Creditors. The 'debt' is defined in Section 3(11) of the IBC, which is as follows: "3(11) "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent application is decided." * The case of the Appellant in the Application was that as per security interest of the Appellant, the Appellant is entitled to 6.93 % i.e. the amount of Rs. 5,64,97,893/- and as per voting share as approved by the CoC, the Appellant is entitled to 2.03% i.e. Rs. 1,65,47,078/-. The case of the Appellant set up in the Application is that he is entitled for his distribution of plan amount as per value of the security interest of the Appellant. The Application was objected by the Resolution Professional. The Adjudicating Authority by the Impugned Order dated 17th March, 2022 rejected the I.A. No. 581 of 2021 upholding the decision of the CoC for distribution of proceeds of the Resolution Plan as per the voting share. Appellant aggrieved by the said Order, has come up in this Appeal." 14. We, thus, are of the view that 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 insta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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