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TMI Blog2024 (6) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... mebuyers under the Resolution Plan, without escalation of price - HELD THAT:- The Homebuyers, who have been allotted the house and amount of consideration has already been fixed in the allotment and it was undertaken by the Corporate Debtor to handover the units on payment of consideration, no exception can be taken to handing over of the units to the Homebuyers on consideration, already paid. The Resolution Plan was approved treating them in two different categories, which was challenged before this Tribunal, on the ground that the treatment of Homebuyers, cannot be discriminated - Present is not a case, where any violation of Section 30, sub-section (2) has been proved by the Appellant. Appellant(s) being dissenting Financial Creditors are entitled to receive their payment as per Section 30, sub-section (2) (b) (ii) and the amounts, which have been offered to dissenting Financial Creditors, is in accordance with the said provision. The Appellants are not entitled to claim payment as per the security interest in the asset of the Corporate Debtor. Appeal dismissed. - [ Justice Ashok Bhushan ] Chairperson And [ Barun Mitra ] Member ( Technical ) For the Appellant : Mr. Abhijeet Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B) executed an Agreement with Radius Estates and Developers Private Limited (the Corporate Debtor) on 31.03.2016, as per which Agreement upon discharging certain costs and obligations, including the obligations to complete construction of Project certain rights were assigned in the project by DB to the Corporate Debtor. (v). The Corporate Debtor issued Non-Convertible Debentures to Beacon Trusteeship Ltd. to the tune of Rs. 65 Crores through private placement to raise funds in the year 2018. (vi). Due to certain financial constraint, the construction could not proceed since March 2018. (vii). The society issued a letter dated 08.05.2020 to the DB terminating the Development Agreement. The termination of Development Agreement lead automatically suspension of the Corporate Debtor rights in the project. (viii). DB filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, before the Bombay High Court and sought interim stay of the termination. Hon ble Bombay High Court had directed for maintaining Status Quo. (ix). In November 2020, Beacon Trusteeship Ltd. filed a C.P. IB No. 1390/2020 under Section 7 for initiating Corporate Insolvency Resolution Process (CIRP) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of construction of the Project. Hence the Resolution Applicant along with the Resolution Plan submitted drafts of the Construction Management Agreement (CMA) and the Master Facility Agreement (MFA) on 17.12.2021. (xxv). In 12th CoC Meeting held on 21.12.2021, Resolution Plan was discussed and voting was slated from 23.12.2021 to 25.12.2021. (xxvi). An I.A. was filed by Appellants before the Adjudicating Authority seeking extension of time for voting in the Resolution Plan. Adjudicating Authority vide order dated 24.12.2021 extended the voting till 27.12.2021. (xxvii). In 13th CoC Meeting held on 25.12.2021, again the Resolution Plan of the Respondent No. 2 and objections raised by the Appellant were discussed, on the basis of voting result dated 27.12.2021, Resolution Plan was approved with 83.99% of the vote shares. Both Beacon Trusteeship Ltd. and ICICI Prudential Venture Capital Fund Real Estate Scheme I dissented to the Resolution Plan. (xxvii)i. CoC by a separate Resolution also approved the execution of the CMA MFA by 83.93% voting shares. (xxix). On 27.12.2021, Consent Terms were also executed between the society and the DB resolving disputes between them. xxx. In pursua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anced by the learned Counsel for the Appellant i.e., appearing for Beacon Trusteeship Ltd. and for the ICICI Prudential Venture Capital Fund Real Estate Scheme I being similar, we proceed to refer to the submissions as submissions of the Appellant. Learned Counsel for the Appellant submits that CMA was entered between with a Corporate Debtor and SRA prior to the approval of the Resolution Plan whereby Respondent No. 2 obtained the sole right to sell the flats in the Project, irrespective of whether the Resolution Plan is approved or not. Adjudicating Authority failed to consider that Resolution Plan was in contravention of Section 30(2) of the Code and it is unfair and inequitable as it provides 93% haircut to the appellant s claims for Secured Financial Creditor, while on the other hand, it provides 100% recovery to Homebuyers by way of allotted units in the Project without them having to bear any haircut or price escalation. 12 . The RP has hurriedly completed the CIRP Process and Respondent No. 2 has put strict timeline for approval of the Resolution Plan to put pressure on the CoC. The Valuation Report which was submitted by the valuers appointed by RP were prepared without all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contemplated that from the date of approval of Resolution Plan by the Adjudicating Authority, the CMA shall come to an end. The allegation that SRA was given right to sell the flats under the CMA was hedged by conditions and further from the date of execution of the CMA, i.e., 27.12.2021 and till approval of the Resolution Plan on 09.01.2023 by the Adjudicating Authority, no flats were sold by Construction Manager, hence the allegation has no substance. 15 . It is submitted that the asset of the Corporate Debtor was only right which was conferred by the DB vide Agreement dated 31.03.2016. It is submitted that DB had been granted Development Right by society vide Agreement dated 31.10.2010 and society having terminated the Agreement unless the Corporate Debtor was resolved and an Agreement is entered into with the society, no right could have been left with the Corporate Debtor to receive anything. Since on termination of Agreement by society of DB automatically the Corporate Debtor shall lose its all rights since it has no privity with the society. 16 . The CoC refused to give any interim finance in spite of requirement of interim finance having been noted in several Meetings of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards construction, the CMA was submitted by the SRA which was requirement of the RFRP. The funding was also contemplated from the SRA hence the draft MFA was also submitted along with the Resolution Plan. The CoC was well aware of the requirement of payment before 31.12.2021 to the MCGM to avail the discount of 50% FSI premium. Hence it was decided to make the payment prior to that date, the SRA was informed to infuse the interim finance as well as start construction hence the CMA cannot be said to violate any provisions of the IBC or the Regulations. 21 . In any view of the matter, CMA came to an end on 09.01.2023 when Resolution Plan was approved and after 09.01.2023, the SRA has proceeded with the construction. The Resolution Plan has been implemented by the SRA. SRA has paid amount to the accenting Creditors under the Resolution Plan as well as to the dissenting Financial Creditors, Operational Creditors and workmen employees has also been paid the amount as per the Plan. The construction in the Project has commenced on 01.01.2022 in accordance with the Clause 5.6 of the RFRP and constructions are likely to complete by June 2024. Resolution Plan is fair and equitable. The rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Financial Creditors. Beacon Trusteeship Ltd. in fact expressed its inability to contribute towards CIRP cost. Resolution Plan has been approved with majority of 83.92% of CoC, dissenting Financial Creditors are raising frivolous objections. The Resolution Plan is fair and equitable. All Homebuyers have been treated alike. Homebuyers are suffering for last several years. All flats have been sold by the Corporate Debtor and promoters to the Homebuyers. Homebuyers were to receive possession in November 2019. Resolution Plan now provide revised date of possession as 06.06.2024. 24. We have heard Counsel for the parties and perused the record. 25 . For considering the submissions raised by learned Counsel for the parties, we need to first notice few Minutes of the CoC and certain clauses of application inviting the EoI and RFRP. We have already noticed above that Corporate Debtor was not developer appointed by the society. Society has appointed DB granting right of redevelopment of the land by Agreement dated 31.10.2010. The DB who was to execute the redevelopment Agreement granted certain rights to the Corporate Debtor upon discharging certain costs and obligations, including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oC for discussion. Mr. Rajesh Sheth representative of homebuyers requested MIG to share presentation given to homebuyers and the society and the same was accepted by the representative of MIG. Mr. Sunil Munot from ICIC stated that they require details of complete business plan in order to arrive at any decision and further, the structure/plan proposed by MIG and Adani should not affect the CIRP and rights of the secured creditors of the CD. Concurring with the view of ICIC, Mr. Vinayak representative of HDFC further added that: a) It is important that the Adani present its credentials in the real estate industry; b) Clarity on rights and obligations of the society and c) the business plan should clearly provide timelines of project completion, cost involved, means of financing, projected cash flows, selling plans etc. The Chairman informed the CoC that structure proposed by MIG and Adani is also required to be legally evaluated in view of the ongoing CIRP. The CoC took note of the same. Representative of Beacon and AR of Homebuyers requested to provide business plan at least one day prior to the meeting, which the representative of MIG an Adani stated that they will try. Representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... save and safeguard the only assets of the Corporate Debtor i.e., development rights over the Ten BKC Project it is important to start the project and enter into settlement with the society. In 5th CoC Meeting held on 21.09.2021, the fee of appointment of the registered valuers was approved. It was further recorded in Item No. 12 that Members of the CoC shown their inability to contribute as interim finance towards construction of the Project. Following is recorded in Item No. 12: Item No. 12 To Consider raising of interim finance The chairman apprised the CoC members that during the last COC meeting, majority of the COC members shown their inability to contribute as interim finance towards the construction of the project. 29. In various CoC Meetings, the Homebuyers had requested to urgently commence construction and arrange for interim finance which is recorded in 6th CoC Meeting held on 07.10.2021. In 7th CoC Meeting, CoC discussed several issues including cost of construction, draft RFRP. The 7th Meeting held on 20.05.2021 draft RFRP was also approved in the said Meeting, subsequently, RFRP was issued by the RP. In Clause 5.6 it was contemplated that after approval of the Plan a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned once they infuse the funds of Rs. 25 Crores or more for the project cost such as approval cost/premium payable to MHADA/MCGM, rent payment, construction cost etc. before 31st December, 2021. It was further agreed by the CoC members that Performance Security in the form of Bank Guarantee shall be taken in the name of HDFC Limited being the largest stakeholder. Representative of HDFC stated that they have observed some referencing errors in the drat RFRP and the same will be emailed separately to incorporate in the draft RFRP. Copy of the Request for resolution plan (RFRP) is attached as Annexure B . Accordingly, the following resolution has been put to vote through electronically. RESOLVED THAT pursuant to provisions of the Reg. 36B of the CIRP Regulations 2016, the Committee of Creditors ( CoC ) hereby approves the RFRP, draft of which was circulated to the CoC and discussed and finalized in the Meeting. 31. As noted above in pursuance of obligation of `Form-G an EoI was received from two entities including Respondent No. 2 but only one Resolution Plan was received from Respondent No. 2, which fact has been noticed that it was only Respondent No. 2 who was only eligible Resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CoC by the Homebuyers that construction should immediately commence. In event, the construction would not have immediately commenced and the disputes with society was not resolved, nothing would have been left in the Corporate Debtor to be resolved, since in event of Termination of Development Agreement with DB, coming into operation all rights of Corporate Debtor could have automatically vanished. The insistence of CoC to complete the process urgently was need of time and circumstances of the case and was in the interest of the Corporate Debtor. 35. We thus do not find any hurry or procedural violation by the RP in conducting the CIRP and approving the Resolution Plan. 36 . Learned Counsel for the Appellant(s) have challenged the Valuation Report obtained by RP in the CIRP. It has been contended that Valuation Report were submitted by Valuers without there being complete information available with them. It is submitted that the Valuation Reports were submitted before the Adjudicating Authority was challenged by the Beacon and ground for challenging the Valuation Reports were advanced, which were rejected by the Adjudicating Authority vide its order dated 02.12.2022 on insuffic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Saleable area Balance Receivables from Sold Area (Radius Estates and Developers Pvt. Ltd. s Share) 418,20,66,363 TOTAL 1471,67,54,363 Balance construction cost of Rehab and Sale Buildings including GST and Contingencies [As per Para 19.1 of the valuation report] 812,60,49,063 Amount (In Rs.) (Incoming) Amount (In Rs.) (Outgoings) Balance Premiums to be paid [As per para 17.1 of the valuation report] 147,88,72,847/- Society related Rent [As per para 6.0 of the valuation report] 105,62,04,500/- Stamp Duty for 50% premium reduction 52,67,34,400/- Admin + Selling expenses etc. 14,00,00,000/- Refund amount (Units already resold) 37,19,30,998/- Statutory Costs (LUC Tax) [As per Annexure- 1] 28,61,15,356/- Interest @ 11% for a period of 30 months 131,81,19,788/- Net Turnover from the Project i.e. Rs. 1471,67,54,363/- - Rs. 131,81,19,788/- = Rs. 1339,86,34,575/- Assuming Developer s Profit from the Net Turnover value @10% 133,98,63,457/- Total 1471,67,54,363/- 1464,08,90,409/- Total Value of Project = Gross Turnover from the project Outgoings = Rs. 1471,67,54,363/- - =Rs. 1464,08,90,409/- = Rs. 7,58,63,954/--(A) ============== The above Residual is differ for a period of 1.5 years @ 13% p. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered valuers as per the provisions of the Code or not? Deciding the correctness or genuineness of valuation reports is not the job of this Tribunal as this Tribunal does not possess the required technical expertise and it is beyond the scope of judicial review and exclusively falls within the domain of COC. Calculation and recovery of pie to pie of each stakeholder is neither possible nor legally permissible under the Code nor is the job of this Tribunal. Even otherwise as rightly submitted by Mr. Kadam, a sum of Rs. 1052,62,O0,000/-being around 86.44% of the amount mentioned in the valuation report is marked for the COC and therefore the correctness of valuation reports also remains an academic issue The record of the Resolution Process reveals that the valuation reports were submitted by two independent Registered Valuers. As a matter of both principle and judicial policy, Courts / Tribunals do not second-guess or sit in appeal over an expert determination conducted by experienced and independent valuers. The settled position of law on this issue is clear from the following rulings viz. Hindustan Lever Employees' Union v. Hindustan Lever Ltd., 1995 Supp (1) SCC 499 , Also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, 2013. Under Section 60 of the Code, it has been designated as the adjudicating authority for corporate persons.] ) [hereinafter referred to as the adjudicating authority NCLT or adjudicating authority or NCLT ], Principal Bench dated 1-9-2021 [IDBI Bank Ltd. v. ACIL Ltd., 2021 SCC OnLine NCLT 30896] by which the application seeking approval of a resolution plan for ACIL Ltd. (hereinafter referred to as either ACIL or the corporate debtor ) being IA No. 1636 of 2019 in CP (IB) No. 170(PB)/2018 (hereinafter referred to as the approval application ) was kept in abeyance while directing the Official Liquidator (hereinafter referred to as the OL ) to carry out a revaluation of the assets of the corporate debtor and to provide exact figures/value of the assets and exact valuation details. 41 . The Hon ble Supreme Court did not approve the judgment of NCLT and NCLAT and has held that Adjudicating Authority s order to direct the revaluation was unsustainable. Revaluation directed by Adjudicating Authority was frowned upon. Following was held in paragraph 35, 36 and 37: 35 . At this juncture, it also cannot be lost sight of that it is for the FC(s) who constitute the CoC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no scope for substituting any commercial term of the resolution plan approved by the Committee of Creditors. If, within its limited jurisdiction, the adjudicating authority finds any shortcoming in the resolution plan vis- -vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by the Code and exposited by this Court. (emphasis supplied) 42 . The Adjudicating Authority has rightly noted and relied on the judgment of Hon ble Supreme Court as referred to in paragraph-5 as extracted above, where Hon ble Supreme Court held that valuation of immovable property is not an exact science, nor can it be determined like an algebraic problem, as it abounds in uncertainties and no straitjacket formula can be laid down for arriving at exact market value of the land. The valuation of Experts cannot be disregarded on objection filed by dissenting Financial Creditors. The Valuation Reports have been shared to all Financial Creditors and after examining the Valuation Reports, the Resolution Plan was approved by overwhelming majority. 43 . Another submission, which has been pressed by le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perational Creditors rights under the Regulation 38 involves the resolution plan stating as to how it has dealt with the interests of Operational Creditors, which is not the same thing as saying that they must be paid the same amount of their debt proportionately. So long as the provisions of the Code and the Regulations have been met, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors. 5 . In Pioneer Urban Land and Infrastructure Limited Anr. v. Union of India Ors . , the Hon ble Supreme Court upheld the Explanation below Section 5(8) (f) to hold that allottees (Homebuyers) of Infrastructure Company are Financial Creditors . It further observed that RERA is in addition to and not in derogation of the provisions of any other law for the time being in force, also makes it clear that the remedies under RERA to allottees were intended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditors in the same proportion to uphold the Resolution Plan. The present is not a case of distribution of any amount rather Resolution Plan provides for ways and manner to complete the project and handover units to the allottees. Allottees have been classified in two groups Affected and Unaffected , as noted above, and we have found the classification justified in the treatment of claims. Learned counsel for the Appellant has failed to point out any violation of any provision of law by aforesaid classification of Affected and Unaffected homebuyers. We, thus, are of the view that the Resolution Plan does not violate any provision of law. 25. We are conscious that the Hon ble Supreme Court in Committee of Creditors of Essar Steel India Limited Through Authorised Signatory vs. Satish Kumar Gupta Ors., (2020) 8 SCC 531 has laid down that there can be difference in payment of the different category of creditors. In Para 88 of the judgment following has been held: 88. By reading paragraph 77 (of Swiss Ribbons) dehors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Paragraph 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyond any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion vested in it under the Code in this particular manner, which has then correctly not been disturbed by the NCLT and NCLAT. Far from helping Shri Sibal s client, the principle that is applied in such a case is that ultimately it is the commercial wisdom of the requisite majority of the Committee of Creditors that must prevail on the facts of any given case, which would include distribution in the manner suggested in Orissa Manganese (supra). It is, therefore, not possible to accept the argument that the Adjudicatory Authority and consequently the Appellate Authority would be vested with the discretion to apply what was applied by the Committee of Creditors in the Orissa Manganese case (supra). This submission is also devoid of merit and is, therefore, rejected. 147. The NCLAT judgment which substitutes its wisdom for the commercial wisdom of the Committee of Creditors and which also directs the admission of a number of claims which was done by the resolution applicant, without prejudice to its right to appeal against the aforesaid judgment, must therefore be set aside. 27. We, thus, are of the view that commercial wisdom of the Committee of Creditors, which has approved the Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the way the RA has effectively dealt with the Society and DB, paid the outstanding amounts towards MCGM premia and other outgoings, and proceeded to resume construction under the Project as its Construction Manager pending consideration of the Plan under Section 31 of IBC, bears testimony to the feasibility and viability of the Plan as also the capability and keenness in implementation on part of the RA. (j) This Tribunal has already upheld the CoC s decision on the equitable treatment and distribution under the Plan to various classes of creditors in its Order dated 2.12.2022 and we confirm the same. We wish to emphasize that the ultimate decision on technical and commercial aspects of the Plan is that of the COC under the commercial wisdom doctrine. It is not open to this Tribunal to second-guess the merits of such decision in exercise of its power under Section 31 of IBC. This has been the consistent legal position as laid down by the Hon ble Supreme Court of India in K. Sashidhar v. Indian Overseas Bank, (2019) 12 SCC 150, Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531 and several decisions thereafter, including Jaypee Kensington v. NBCC, (2022) 1 SCC 401 , w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest which was owned by Financial Creditor, it was held that despite Financial Creditor have security interest in the assets of the Corporate Debtor they can be dealt with in the Resolution Plan in any manner as per the commercial wisdom of the CoC. In paragraph 22 of the Judgment, following was observed: 22 . The above can be explained by taking example of a Financial Creditor. Financial Creditors may also have security interest in the assets of the Corporate Debtor. Section 30 of the Code, as amended from time to time, provides for payment to Operational Creditor(s) as well as dissenting Financial Creditor(s), which payment shall not be less than the amount which they are entitled to receive under Sub-section (1) of Section 53 in event of liquidation of the Corporate Debtor. Insolvency resolution process and liquidation are two different concepts with two different consequences. When in the insolvency resolution process claim of Financial Creditors are dealt with, there is no cap to the effect that they are entitled to receive the amount equivalent to their debt which is owed by the Corporate Debtor. Thus, despite Financial Creditor having security interest in the assets of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 the directions be issued to the Respondent No. 1 modify/clarify the distribution to dissenting members as per the Resolution Plan and distribute the proceeds of the resolution plan to Applicant SIDBI for an amount of Rs. 5,64,97,893/- in priority in accordance with provisions of IBC 2016 in the interest of justice and equity. 2. Interim stay be granted on distribution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the same has been explained by this Court in Essar Steel [Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 : (2021) 2 SCC (Civ) 443] as under : (SCC pp. 628-29, para 128) 128. When it comes to the validity of the substitution of Section 30(2)(b) by Section 6 of the amending Act of 2019, it is clear that the substituted Section 30(2)(b) gives the operational creditors something more than was given earlier as it is the higher of the figures mentioned in subclauses (i) and (ii) of sub-clause (b) that is now to be paid as a minimum amount to the operational creditors. The same goes for the latter part of subclause (b) which refers to dissentient financial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor) has pledged its shares for loan facility availed by two group companies i.e. Brassco Engineers Ltd. and WLD Investments Pvt. Ltd. In the insolvency proceeding of the Corporate Debtor, claim was filed by Vistra ITCL (India) Ltd., the Security Trustee in Form C , which claim was rejected. Resolution Plan was approved. Thereafter, an application was filed claiming right on the basis of pledged shares. I.A. No. 62 of 2020 as well as Appeal having been dismissed, Appeal was filed before the Hon'ble Supreme Court. Hon'ble Supreme Court in the above case, noticed the judgment of Anuj Jain v. Axis Bank Ltd. (supra). Hon'ble Supreme Court in Para 9 noticed the issues raised and observed that two-fold answers can be given to the problem. First was to treat the Secured Creditor as a Financial Creditor, which according to the judgment of the Hon'ble Supreme Court may require reference to a larger bench. Hence, the Hon'ble Supreme Court proceeded to the Second option under which the Hon'ble Supreme Court held that Appellant was entitled to retain the security interest in the pledged shares, which means was entitled to retain the security proceeds on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the Respondent is that the judgment of the Hon'ble Supreme Court in Vistra ITCL (India) Ltd. is judgment of the Supreme Court where Hon'ble Supreme Court has exercised its jurisdiction under Article 142 of the Constitution. Observation of the Hon'ble Supreme Court in Para 9 that This to our mind would be a fair and just solution to the legal conundrum and issue highlighted before us. , indicate that the solution which was followed by Supreme Court was in the facts of the said case and observation of the Hon'ble Supreme Court in Para 9 cannot be read as laying law within meaning of Article 141. 35 . A third-party security interest holder is entitled to retain the security proceeds on the land of security interest under Section 52 of the Code. As noted above, Section 52 and 53 becomes applicable only in Liquidation Proceeding and reference of Section 53 under Section 30(2) is for the purpose of computing the payment to Operational Creditors and dissenting Financial Creditors to which they may be entitled under Section 53. 36 . We, thus, accept the submission of learned counsel for the Respondent that judgment of Hon'ble Supreme Court in Vistra ITCL (India) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court in the above judgment that Article 142 of the Constitution is supplementary in nature and cannot supplant the substantive provisions, though they are not limited by the substantive provisions in the statute. It is a power that gives preference to equity over law. Differentiation in Article 141 and 142 has been noticed. Following has been observed in Para 12: 12. .This Court on the qui vive has expanded the horizons of Article 142 of the Constitution by keeping it outside the purview of Article 141 of the Constitution and by declaring it a direction of the Court that changes its complexion with the peculiarity in the facts and circumstances of the case. 38 . We, thus, are of the view that judgment of Hon'ble Supreme Court in Vistra ITCL (India) Ltd. is in facts of the said case. The Appellant in the present case cannot rely on the said judgment as a declaration of law within the meaning of Article 141 of the Constitution of India. 54. Judgment of the Hon ble Supreme Court in ` Vistara ITCL (India) Ltd. Ors. (Supra) does not come to help of the Appellant in the present case. It is relevant to notice that Hon ble Supreme Court in ` DBS Bank Ltd. Singapor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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