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2022 (6) TMI 283 - Insolvency & Bankruptcy
Head Note / Extract:
CIRP - Rejection of impleadment - allottees of “Amadeus” a real estate project being developed by the Corporate Debtor - Whether the application for impleadment filed by the Appellants before the Adjudicating Authority seeking impleadment in I.A. Nos 2275 of 2021 and 2286 of 2021 deserve rejection on the ground that Authorised Representative of Homebuyers who are creditors in class is not representing the creditors in a class before the Adjudicating Authority? - Whether the Appellants have no right to participate in adjudication of the claim of the Financial Creditors whose claim has been rejected by the IRP? - Whether the Adjudicating Authority committed error in rejecting impleadment application filed by the Appellants? HELD THAT:- The statutory scheme as is reflected from Section 21(6-A) and Section 25-A of the Code indicates that the Authorised Representative is chosen to represent the creditor in a class in the CoC. The Authorised Representative needs to attend the meeting of the CoC and vote on behalf of the Financial Creditor to the extent of voting share of the Financial Creditor. The Adjudicating Authority in its order has referred to Regulation 16A Sub-regulation (5) of the CIRP Regulations, 2016. Regulation 16A deals with the Authorised Representative. Regulation 16A provides for procedure of choosing an Authorised Representative of creditors of the respective class - The mere fact that the Authorised Representative of a creditor in a class have no role in receipt and verification of the claim of the creditors, it cannot be held to mean that creditors in a class have no right with regard to receipt and verification of their claim. The clarification as contained in Regulation 16A(5) has been read by the Adjudicating Authority to an extent which it never meant. The conclusion recorded by the Adjudicating Authority in paragraph 23 on the basis of erroneous interpretation of Regulation 16A(5) resulted in a wrong conclusion that the creditors in a class have no role in receipt or verification of claims of creditors. Right of impleadment of Appellants in Applications filed by Respondent No. 2 and 3 challenging the rejection of their claim as Financial Creditors - HELD THAT:- The Appellants are also Financial Creditors in a class and they represent majority of the Homebuyers in class, as has been pleaded by the Appellants. The Financial Creditors in a class, who at present consist of 99.85% of CoC, have every right to be heard in the Applications filed by Respondent No. 2 and 3 whose claim has been partly and fully rejected, respectively by the IRP - It cannot be said that since the Authorised Representative has not came up before the Adjudicating Authority for filing the impleadment application, the Appellants who themselves are Homebuyers have no right to participate in the adjudication initiated by filing applications by Respondent No. 2 and 3. The Hon’ble Supreme Court held that Phoenix Arc Pvt. Ltd. [2021 (2) TMI 91 - SUPREME COURT] and Yes Bank [2019 (1) TMI 1800 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] being Financial Creditors they were legitimately within the right to seek direction for exclusion of AAA Landmark Pvt. Ltd. and Spade Financial Services Pvt. Ltd. from the CoC. The Adjudicating Authority committed error in rejecting impleadment application filed by the Appellants to implead them as party respondent - Appeal allowed.