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TMI Blog2024 (7) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... etween the Homebuyers who purchase units for his own consumption or the Homebuyers or unit purchaser who purchase the multiple units for commercial purposes. It becomes clear that whether the homebuyer/ allottee is genuine homebuyer or genuine allottee or speculative homebuyers/ allottee but if he has paid the money for acquisition of such properties or given the advance, such allottee/ homebuyer shall be treated as Financial Creditor in terms of Section 5(8)(f) of the Code . Hence, the pleadings of the Respondent No. 2 in this regard that the Appellant is speculative investor will not affect the rights of the Appellant to be treated as the Financial Creditors. From judgment of Essar Steel India [ 2019 (11) TMI 731 - SUPREME COURT ], it is clear that once the CoC approves the Resolution Plan by the requisite majority, the same cannot be challenged by any individual unit buyer/ homebuyer like the Appellant in the present appeal - This makes absolutely clear that the Resolution Plan may provide different categories of creditors and different payment schemes, as seen in the present case which is valid and legally enforceable. The ratio of the above judgment is very explicit and clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CoC which approved the Resolution Plan with 100% voting. The Resolution Plan was submitted by Resolution Professional for approval of the Adjudicating Authority in I.A. No. 6676 of 2023 under Section 30(6) of the Code. Vide Para 46 of the Impugned Order dated 05.04.2024 the Resolution Plan was approved by the Adjudicating Authority. The relevant portion of the aforesaid para reads as under :- 46. In the sequel to the above, we are inclined to approve the Resolution Plan as approved/ recommended by the CoC as placed by the Applicant before this Adjudicating Authority 5. In the same Impugned Order several I.A s were also discussed and disposed off. 6. The Appellant had filed I.A. No. 144 of 2023 which was also discussed in the Impugned Order from Para 15 to 21 and after discussing various issues and recording the submissions of the Appellant and Respondent No. 1, the I.A. No. 114 of 2023 of the Appellant was rejected. The relevant para 21 of the Impugned Order is read as under :- 21. A perusal of the aforementioned provision of RERA, 2016 and MOU clearly reveal that there was no valid BBA in existence in favour of the Applicant, thus there was no infirmity in its classification as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration of Rs. 12.50 Crores and out of which the Appellant paid Rs. 10 Crores by cheques between 2014-2016. 11. The Appellant submitted that the Corporate Debtor and the Appellant entered into a MOU dated 24.05.2016 which contained the various terms and conditions of allotment and obligations of the parties. The Appellant drawn attention in this Appellate Tribunal to clause 1.1, 1,2, 1.3, 2.1, 2.2, 2.5, 3.1 and argued that perusal of these clauses makes it clear that MOU was in nature of Builders Buyers Agreement (in short BBA ). We take note of the MOU which was filed in the Appeal Paper Book as Annexure A-3 from Pg 126 to 134. 12. The Appellant submitted that based on public announcement inviting claims by creditors by Respondent No. 1, the Appellant submitted its claim before Respondent No. 1 in the capacity of Financial Creditor in Clause-A under Form CA along with supporting documents including the MOU and proof of payments on 20.04.2022. 13. The Appellant submitted that aggrieved by the conduct of the Corporate Debtor in its failure to handover the units, simultaneously the Appellant filed an FIR dated 04.06.2022 against the Corporate Debtor and its directors for crimi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegory, however, the same was rejected by the Adjudicating Authority vide Impugned Order dated 05.04.2024 mainly on the ground that the MOU cannot be equated with BBA. 19 . In this connection, we have already noted the relevant para 21 of the Impugned Order rejecting I.A. No. 114 of 2023 in our earlier discussion. 20 . It is the case of the Appellant that the Real Estate Regulatory Authority Act, 2016 (in short RERA Act ) does not define the term BBA and referred to Section 2(c) of RERA Act which only defines Agreement for sale and Section 2(d) of RERA Act which defines Allottees along with Section 2(e) which defines Apartment . The Appellant argued that these definitions are vide enough to cover MOU to be treated as agreement to sale or BBA. 21 . The Appellant pleaded that the nomenclature of the documents is not relevant and decisive factor in determining the true nature and legal effect of any document ie., MOU Vs. BBA, the Adjudicating Authority should have gone into the various clauses of MOU to establish that his claim to be classified in category 2. 22 . The Appellant submitted that it is undisputed fact that he has paid Rs. 10 Crores to the Corporate Debtor and the MOU ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appeal. 31 . Opposing the appeal, the Respondent No. 2 stated that the Appeal is without any merit. The Respondent No. 2 refuted the pleadings of the Appellant that the MOU is equivalent agreement to sale or BBA and highlighted that recital C of MOU does not specify any area or earmarked units, whereas the homebuyers agreement/ BBA provides specifies unit members and the area therein. 32. The Respondent No. 2 also stated that the Appellant never produced alleged Annexures I mentions in the said recital C of the MOU and neither filed the same before the Resolution Professional or the Adjudicating Authority. 33 . The Respondent No. 2 submitted that Clauses 4 and 5 of MOU makes it clear that the Appellant is basically concerned with the return on investment and has further been given special right of termination in clause C of MOU which has not been given to any other homebuyers. The Respondent No. 2 submitted that all these features of the MOU make it abundantly clear that the Appellant is not genuine homebuyer and at the best the Appellant may be treated speculative investor. 34 . The Respondent No. 2 also refuted the claims of the Appellant that in terms of RERA Act, the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be dismissed with cost. Findings 40. The Respondent No. 2 has pleaded that the Appellant is not genuine homebuyer and at the best is speculative investor. Hence, it would be desirable to go into aspects of genuine homebuyers vis- -vis speculative investors to see whether this adversely affect the rights of the Appellant in this case. Both the Appellant and the Respondents have also referred to various definitions and provisions stipulated in RERA Act. Hence, it would also be desirable to look into the relevant definitions and provisions of RERA Act. 41 . We would also like to take into account the definition of Allottee and the Real Estate Project which as per Section 5(8)(f) of the Code has been assigned the same meaning as contained in Real Estate (Regulation and Development) Act, 2016 (in short RERA Act, 2016) and relevant clause on the RERA Act, 2016 reads as under:- 2. Definitions .-In this Act, unless the context otherwise requires, (d) allottee in relation to a real estate project, means the person to whom a plot, apartment or building, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e who has paid the amount in the Real Estate Project shall be deemed to be Financial Creditor and the said amount paid to Real Estate Developers will be treated having commercial effect of the borrowing. 44. The definition of the allottee as contained in Section 2(d) of RERA Act, 2016 defines as the person to whom plot, apartment, or the building as the case may be has been allotted or sold, whether free hold or lease hold or otherwise transferred by the Promoters including person who acquired the said allotment through sale, transfer or otherwise but does not include a person to whom some plot or apartment or building as the case may be is given on rent. 45. Since, 2(d) also mentioned about apartment which is defined in Section 2(e) of the RERA Act, 2016, we will take into consideration the definition of Apartment which reads as under :- 2(e) apartment whether called block, chamber, dwelling unit, flat, office, showroom, shop, godown, premises, suit, tenement, unit or by any other name, means a separate and self-contained part of any immovable property, including one or more rooms or enclosed spaces, located on one or more floors or any part thereof, in a building or on a plot of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the homebuyer/ allottee is genuine homebuyer or genuine allottee or speculative homebuyers/ allottee but if he has paid the money for acquisition of such properties or given the advance, such allottee/ homebuyer shall be treated as Financial Creditor in terms of Section 5(8)(f) of the Code . Hence, the pleadings of the Respondent No. 2 in this regard that the Appellant is speculative investor will not affect the rights of the Appellant to be treated as the Financial Creditors. 51 . Now, we shall take up the main contentious issue which is root cause of the present appeal i.e., regarding categorisation of the Appellant in Category 4 rather than in Category 2 of the Resolution Plan. We shall deal this issue along with other related issues in the subsequent discussions. 52 . We note that under Chapter 8 of the Resolution Plan, the Respondent No. 2 bifurcated claims of homebuyers into following four categories:- (i) Whose Possession has been handed over to Flat Owners. (ii) Whose Possession of Flats to Flat Owners is pending as on CIRP date. (iii) Cancelled Units (having valid Builder Buyer Agreement/ BBA). (iv) Cancelled Units (not having valid BBA). 53 . We note that homebuyers i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te that there is only an MOU dated 24.05.2016 which give description of 25,000 sq. ft. without any further elaboration regarding unit no., floors or any other details. Technically since the definition of allottee under Section 2(d) of the RERA Act is quite wide which include person to whom apartments has been allotted and definition of apartment is given in Section 2(e) of the RERA Act which is again very vide definition but which clearly indicate means of separate and self contained part of any immovable property. Such separate and self contained unit details is again not found in the present case as there is no separate or self contained part on any immovable property mentioned in the MOU. 58 . We have already noted that recital C clearly mention that the said area more specifically describe in Annexure I of this MOU however, no Annexure- I has been produced by the Appellant. In this respect during pleadings, this Appellate Tribunal specifically asked the Appellant to link and produce the said Annexure I as mentioned in Recital C of the MOU, however, the Appellant could not do so and we therefore conclude that no specific units were mentioned by the Corporate Debtor. The contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant would have been placed in category 2nd i.e., Whose Possession of Flats to Flat Owners is pending as on CIRP date he would have recieved 40% of amount paid whereas by finding himself in category 4 the Appellant will be merely getting 5% of the amount paid. We appreciate the grievances of the Appellant. However, we note that the Appellant itself is a registered company under Companies Act, 1956 and itself Real Estate and Developer Company who knows the implications of buying and selling of properties and also understand the implications of legal documents and proper title deeds by way of document like agreement to sale or BBA. Hence, the arguments of Appellant that the MOU should be treated at par with BBA or agreement to sale is not justifiable. 63. We note that there is suitable logic and rational in classification of homebuyers in 4 categories. The 1st category is applicable to those unit holders whose possession has been handed over. Next category is the unit holders whose possession of units is pending on CIRP dates. The 3rd category is for the unit holders having cancelled units but having valid BBA and last residual category is for all unit holders having cancelled un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. Also, the fact that the operational creditors are given priority in payment over all financial creditors does not lead to the conclusion that such payment must necessarily be the same recovery percentage as financial creditors. 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. (Emphasis Supplied) 67 . From above judgment of Essar Steel India (Supra), it is clear that once the CoC approves the Resolution Plan by the requisite majority, the same cannot be challenged by any individual unit buyer/ homebuyer like the Appellant in the present appeal. 68 . We note that the Hon ble Supreme Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, in our view, after approval of the Resolution Plan of NBCC by CoC, where homebuyers as a class assented to the Plan, any individual homebuyer or association cannot maintain any challenge to the Resolution Plan nor could be treated as carrying any legal grievance. (Emphasis Supplied) 69 . This makes absolutely clear that the Resolution Plan may provide different categories of creditors and different payment schemes, as seen in the present case which is valid and legally enforceable. The ratio of the above judgment is very explicit and clear and therefore we find that the Appellant has no locus in the present appeal to challenge the Resolution Plan or his classification in category 4 of the Resolution Plan on his own as individual homebuyer/ allottees. 70 . As regard the plea of the Appellant that his claims were accepted by the Respondent No. 1 initially as homebuyer and the Respondents erred in classifying his claims in category 4 subsequently and therefore, the Impugned Order approving the Resolution Plan in classifying him into category 4 is perverse. In this connection, we note the relevant portion of this Appellate Tribunal earlier order in the case of Fervent Syner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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