9911796707
TMI Blog2021 (3) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... , Adv. Mr. B. Ramana Murthy, AOR Mr. Sumant Batra, Adv. Mr. Sanjay Bhatt, Adv. Ms. Niharika Sharma, Mr. Joydeep Mukherjee, Adv. Ms. Akansha Srivastava, Adv Mr. Rabin Majumder, AOR 3 Mr. Punit Dutt Tyagi, AOR Mr. Sahil Narang, AOR Hasan Murtaza, AOR For the Respondent : Mr. Sahil Narang, AOR Mr. Harish Salve, Sr. Adv. Mr. Shyam Divan, Sr. Adv. Ms. Misha, Adv. Mr. Nikhil Mathur, Adv. Mr. S.S. Shroff, AOR Mr. Vishal Gupta, AOR Mr. Mukul Rohtagi, Sr. Adv. Mr. Sajan Poovayya, Sr. Adv. Mr. Amar Gupta, Adv. Mr. Divyam Agarwal, AOR Mr. Ashish Joshi, Adv. Mr. L.K. Bhushan, Adv. Mr. Mohit Sharma, Adv. M/S. Dua Associates, AOR Mr. Rabin Majumder, AOR M/S. Cyril Amarchand Mangaldas Aor, AOR Mr. Amit Pawan, AOR Mr. Sachin Sharma, AOR Mr. Himanshu Shekhar, AOR Mr. Jamnesh Kumar, Adv. Mrs. Revathy Raghavan, AOR Mr. Ram Lal Roy, AOR Mr. Hasan Murtaza, AOR Mr. Shariq Ahmed, Adv. Mr. Tariq Ahmed, Adv. Mr. Saju Jakob, Adv. Mr. Sunil Kumar Verma, AOR JUDGMENT Dinesh Maheshwari, J. Introductory Permission to file special leave petition(s) and leave granted in respective Petition(s) for Special Leave to Appeal. 2. This batch of civil appeals, special appeals and transfer cases essentially relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essions 'the Tribunal' or 'NCLT' or 'the Adjudicating Authority' refer to the said transferee Bench too, as per the given context.), Allahabad Bench admitted the petition filed by one of the financial creditors, IDBI Bank Limited, under Section 7 of the Code. However, when the Interim Resolution Professional-'IRP' for short invited claims in this CIRP, the treatment of homebuyers became an issue contentious, because they were treated only as 'other creditors', not at par with financial and operational creditors. 4.2. The aforesaid position led to the proceedings in this Court, which were dealt with in a batch of petitions led by Writ Petition (Civil) No. 744 of 2017: Chitra Sharma and Ors. v. Union of India and Ors. Final judgment therein has since been reported as (2018) 18 SCC 575. wherein, several orders were passed by this Court from time to time, inter alia, with directions to JAL, the holding company of JIL, for making deposits in the Court, particularly looking to the claim of refund being made by some of the homebuyers. While finally disposing of the matters on 09.08.2018, this Court took note of several factors, including the nature of projects, interests of a large numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociates Limited and Anr. v. IDBI Bank Ltd. and Anr. Final judgment therein has since been reported as (2020) 3 SCC 328, which were decided on 06.11.2019. Therein, this Court found that delay in completion of CIRP was attributable to the process of law and neither the homebuyers nor any other financial creditor was to be blamed for pendency of the proceedings; and under the plenary powers, this Court passed yet further orders so as to ensure that an attempt was made for revival of the corporate debtor by submission of revised resolution plans. 4.4. Running parallel to the proceedings noticed hereinabove, there had been another set of proceedings involving two issues: one, relating to an application filed by IRP before the Adjudicating Authority seeking orders for avoidance of the certain transactions, whereby several parcels of land were put under mortgage with the lenders of JAL, the holding company of JIL; and second, involving the claim of two of the lender banks of JAL to be included in the category of financial creditors of JIL. These two aspects eventually came up for adjudication of this Court in another batch of appeals led by Civil Appeal Nos. 8512-8527 of 2019: Anuj Jain, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in the appropriate forum- A few typographical errors in this order dated 03.03.2020 were corrected by NCLT by its order dated 17.03.2020. 4.7. The resolution applicant NBCC preferred an appeal against the aforesaid order dated 03.03.2020 before the National Company Law Appellate Tribunal, New Delhi, being Company Appeal (AT) (Insolvency) No. 465 of 2020 wherein the Appellate Authority, while issuing notice to the unrepresented parties, made an interim order dated 22.04.2020 that the approved resolution plan may be implemented subject to the outcome of appeal but at the same time, also provided that IRP may constitute an 'Interim Monitoring Committee' comprising of the successful resolution applicant (NBCC) and three major institutional financial creditors, who were the members of CoC. 4.8. As against the aforesaid order dated 22.04.2020, six associations of homebuyers in the real estate development projects of the corporate debtor and a few individual homebuyers approached this Court seeking permission to maintain their appeals under Section 62 of the Code. Notices were issued on the prayers so made, returnable on 06.08.2020. 4.9. On 06.08.2020, it was urged before us that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be an exhaustive list of the parties involved. 6.1. The main parties before us in this batch, in terms of their respective stands, contentions and viewpoints vis-à-vis the aforementioned pivots could be broadly divided in two categories. One category is of the parties who stand for the resolution plan, as approved by the CoC but who state grievance against a few parts of the aforesaid orders dated 03.03.2020 and 22.04.2020, insofar as providing for modification of the resolution plan and modified mechanism for its implementation. The other category is of the parties who carry grievances against the resolution plan for one or more of its prescriptions or omissions; and/or who are dissatisfied with the order dated 03.03.2020 insofar as their objections have either been rejected or not taken into account; and/or who are dissatisfied with the order dated 22.04.2020 for the reasons different than those of the parties of first part. The parties standing for the resolution plan 7. The two entities who need not, as such, be aligned with any of the other contesting parties but for practical purposes, stand for the resolution plan as approved by CoC are: (i) the corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are the following: 8.1. NBCC (India) Limited (NBCC): NBCC (India) Limited is the resolution applicant and had prepared the resolution plan for JIL, which was approved by a majority of 97.36% of the voting share of the CoC. NBCC seeks setting aside of those parts of the order dated 03.03.2020 where the NCLT has modified some of the terms of resolution plan and/or has issued certain directions. The appeal filed by this company, being Company Appeal (AT) (Insolvency) No. 475 of 2020, stands transferred to this Court and is registered as T.C. (C) No. 236 of 2020. This company is also the respondent in various other appeals/petitions and has comprehensively opposed the objections raised against the resolution plan.- This company has introduced itself in its resolution plan as "Navratna" status Central Public Sector Enterprise, under the aegis of Ministry of Housing and Urban Affairs, Government of India, having diversified its areas of operation in various segments including real estate. 8.2. IDBI Bank Limited: This bank is standing in the capacity of an institutional financial creditor of the corporate debtor JIL. The corporate insolvency resolution process in relation to the corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors consists of such persons/entities who otherwise belong to the class of 'homebuyers' but have their own grievances in relation to the resolution plan and the subsequent orders. This set of parties could be introduced as follows: 10.1. Wish Town Home Buyers Welfare Society: This is a society of homebuyers in the projects of JIL who seeks implementation of the projects but carries reservations on some of the terms of the resolution plan, where the requisite compensation in relation to the delayed implementation of the projects by JIL has not been provided, particularly in terms of Section 18 of the Real Estate (Regulation and Development) Act, 2016- Hereinafter also referred to as 'RERA'. It has also been suggested that the plan of another resolution applicant Suraksha Realty was far better than that of NBCC. This society also has the grievance that NBCC has failed to specify in the resolution plan the treatment and utilisation of the sum of INR 750 crores received from JAL as also 758 acres of land that had come to JIL after the judgment of this Court dated 26.02.2020. This society had filed Company Appeal (AT) (Insolvency) No. 506 of 2020 before NCLAT against the said orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 03.03.2020. 10.5. Ishwar Kewalramani and 76 Others: These are the applicants of another impleadment application being I.A. No. 88795 of 2020 in Civil Appeal No. 3395 of 2020; they are homebuyers of the projects undertaken by JIL and are aggrieved by the order dated 03.03.2020 insofar as NCLT has failed to specify the use of 758 acres of unencumbered land now available with JIL; and another grievance is that NBCC has violated the statutory provisions by not providing compensation to the homebuyers due to delayed possession. 10.6. Ashok Chandra: He is another homebuyer who has moved I.A. No. 84309 of 2020 in Civil Appeal No. 3395 of 2020 and seeks direction to determine adequate and fair amount of compensation to be paid to the homebuyers due to the unreasonable delay in completion. He has also suggested that different mechanism is required to be provided for dealing with the CIRP in question, in displacement of the resolution plan of NBCC. 11. Other objectors to the resolution plan and the order of NCLT dated 03.03.2020 could be broadly sub-divided into three: one being the holding company of the corporate debtor JIL and the persons/entities related with these companies; se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that is how he became the seventh respondent in the appeal of NBCC. According to his submissions, the IRP failed to ensure that the resolution plan did not contravene the law for the time being in force; and that approval by CoC leaves much to be desired. Several of the stipulations and prescriptions in the resolution plan of NBCC are put to question by him. 13. The second sub-sect of objectors to the resolution plan consists of the institutional financial creditor of the corporate debtor JIL, being ICICI Bank Limited. 13.1. The directions issued by NCLT in modification of the resolution plan in regard to the claim of this bank for payment, in its capacity as the dissenting financial creditor of JIL, is one of the major grounds of challenge by the persons/entities standing in favour of the resolution plan in question. This bank has also objected to the clauses in the resolution plan in regard to the treatment of the said sum of INR 750 crores. In its another capacity as the lender of JAL and having mortgage over the land of JIL in security of such lending to JAL, this bank has levied another challenge to the resolution plan in regard to the release of its security interest. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seek direction for entering into sale deed/s of plot/s in Jaypee Greens Wish Town or for refund. They had also filed an appeal before NCLAT against the said order dated 03.03.2020, being Company Appeal (AT) (Insolvency) No. 547 of 2020 that stands transferred to this Court and is registered as T.C. (C) No. 241 of 2020. 14.4. Raman Prakash Mangala and 29 others: They are minority shareholders of JIL and their assertion is that the resolution plan approved by CoC ought to consider the interests of minority shareholders by giving fair market value of the equity shares held by them. Their appeal against the order dated 03.03.2020 before NCLAT, being Company Appeal (AT) (Insolvency) No. 630 of 2020, also stands transferred to this Court and is registered as T.C. (C) No. 239 of 2020. 14.5. Gyanendra Kumar Raveendra: He is also a minority shareholder of JIL and has moved an application for impleadment in Civil Appeal No. 3395 of 2020, being I.A. No. 89429 of 2020. He is similarly aggrieved by the action of NBCC to extinguish the right of the minority shareholders without giving them a 'fair value' of their shares. Points for determination 15. Having drawn a brief sketch and outlin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in assuming that YES Bank Limited had agreed for constitution of a committee to take forward the disinvestment process of Jaypee Healthcare Limited? G. As to whether the stipulation in the resolution plan for cancellation of certain agreements/sub-leases is unfair and the Adjudicating Authority has erred in not modifying the same? H. As to whether the minority shareholders are entitled to state their claims/objections despite having not approached the Adjudicating Authority; and as to whether the resolution plan does not provide fair treatment to the minority shareholders? I. (i) As to whether, after approval of the resolution plan of NBCC by the Committee of Creditors, where homebuyers as a class assented to the plan, any individual homebuyer or any association of homebuyers could maintain a challenge to the resolution plan and could be treated as a dissenting financial creditor or an aggrieved person? (ii) As to whether the stipulations in the resolution plan stand in violation of the provisions of the Real Estate (Regulation and Development) Act, 2016? (iii) As to whether the resolution plan is violative of the requirements of CIRP Regulations? (iv) As to whether a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of a notification dated 24.04.2001, the Government of Uttar Pradesh, in exercise of its powers under Section 3 of the U.P. Act of 1976, proceeded to set up Taj Expressway Industrial Development Authority ('TEA') for anchoring development of Taj Expressway Project, being that of a six-lane 160 km long Super Expressway with service roads and associated facilities connecting Noida and Agra, passing through a so-called virgin area along the river Yamuna. 17.2. At the initial stages, the said Taj Expressway Industrial Development Authority invited bids for selecting the entity for execution of the project. In this process, ultimately, the company known as Jaiprakash Industries Limited came out as the successful bidder. This company, Jaiprakash Industries Limited, is now named as Jaiprakash Associates Limited ('JAL'). 17.3. After the said bidding process, a Concession Agreement dated 07.02.2003 was executed between the principal TEA and the successful bidder Jaiprakash Industries Limited, who came to be referred to as the "concessionaire". Various terms and stipulations of this Concession Agreement form the subject matter of one segment of dispute in the present litigation, as dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proximately 71.64% equity shareholding in JIL as on 31.03.2017. Admittedly, JAL had been the holding company of JIL. When JIL was set up as an SPV for the purpose of execution of the project/s under the said CA, finances were obtained from a consortium of banks against the partial mortgage of land acquired and a pledge of 51% of the shareholding held by JAL. Accordingly, JIL took up those two projects; the Expressway was laid and JIL also started developing real estate projects in two locations of the land acquired, one in Wish Town, Noida and another in Mirzapur. 17.6. However, JIL defaulted in several of its obligations, including those in completion of the real estate projects as proposed and in payment of dues of the lender financial institutions. 18. The default on the part of JIL in payment of its dues led the lender bank, IDBI Bank Limited, instituting a petition under Section 7 of the Code before the NCLT, for initiation of the corporate insolvency resolution process against JIL. The applicant bank alleged that JIL had committed a default in repayment of its dues to the tune of INR 526.11 crores. JIL filed its objections to the petition but later on, withdrew the objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, this Court provided a reprieve to the CIRP in question while making further orders in the interests of homebuyers and other creditors. 19.1. The proceedings and the orders passed by this Court in the said case of Chitra Sharma are of material bearing in the present case and, therefore, may be usefully recounted in necessary details. Orders and directions in the case of Chitra Sharma 20. As noticed, this Court was moved in the case of Chitra Sharma (supra) essentially for the reason that a large number of homebuyers, who had invested in the real estate projects proposed by JAL and JIL, were feeling distressed in the wake of the proposed CIRP concerning JIL and who were likely to be left in the lurch because, at the given stage, while IBC recognised three categories of stakeholders namely, (i) corporate debtors; (ii) financial creditors; and (iii) operational creditors but, the homebuyers, otherwise having a direct and substantial interest in CIRP with investment of lifetime, were being treated only as 'other creditors'. In the given scenario, on being moved, this Court issued notice on 04.09.2017 in the said batch of petitions; the proceedings before the NCLT at Allahabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87575 of 2017 in SLPs (C) Nos. 24001- 24002 of 2017 (D. Nos. 27277, 27579 and 27624 of 2017) The present interlocutory application has been filed by the IDBI Bank Ltd. in the special leave petitions which have been registered as SLPs (C) Nos. 24001 and 24002 of 2017. This is an application for vacating/modification of the order dated 4-9-2017. On that day, this Court while issuing notice, had passed the following order: "2. .....In the meantime the impugned order(s) passed by the National Company Law Tribunal, Allahabad shall remain stayed until further orders. A copy of the special leave petition be served on the office of learned Attorney General for India. All applications for impleadment/intervention stand allowed." Mr K.K. Venugopal, learned Attorney General for India appearing for Respondents 1 and 2 submitted that the order passed by this Court on 4-9-2017 needs to be vacated or modified because the consequence of the stay would be that the Management of Respondent 3, Jaypee Infratech Ltd. would stand restored. This was not a consequence intended by this Court. It is urged by him that if the erstwhile Management of the said company continues, it will affect the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said purpose, if any assets or property of JAL have to be sold, that should be done after obtaining prior approval of this Court. Any person who was a Director or Managing Director of JIL or JAL on the date of the institution of the insolvency proceedings against JIL as well as the present Directors/Managing Director shall also not leave the country without prior permission of this Court. The foregoing restraint shall not apply to nominee Directors of lending institutions (IDBI/ICICI/SBI); e) All suits and proceeding instituted against JIL shall in terms of Section 14(1)(a) remain stayed as we have directed the IRP to remain in Management. Be it clarified that we have passed this order keeping in view the provisions of the Act and also the interest of the homebuyers. IA stands disposed of accordingly. The matter be listed at 2.00 p.m. on 13-11-2017. The prior date given by this Court i.e. 10-10-2017 stands cancelled." (emphasis in bold supplied) 20.1.2. It could be readily noticed that in formulating the directions aforesaid, this Court initiated steps to protect the interests of homebuyers essentially for the reason that, at the given stage, homebuyers were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, are non-transferable. We have also heard Mr Ajit Kumar Sinha, learned Senior Counsel appearing for some of the homebuyers. There are other counsel who are representing the homebuyers who are interested in having their flats. We do not want to address the said aspect today. We are not inclined to entertain the application for modification of the order dated 11-9-2017. However, we extend the time to deposit the sum of Rs. 2000 crores (Rupees two thousand crores) till 5-11-2017." 20.3. Then, on 13.11.2017, this Court appointed learned counsel Mr. Pawanshree Agarwal as the amicus curiae, who was to open a web portal on which details of homebuyers could be uploaded. All the Directors of JAL, except institutional Directors were ordered to remain present before the Court on the next date with the affidavits disclosing their personal assets. This order dated 13.11.2017 reads as under: - "All the applications for impleadment/intervention stand allowed. The homebuyers are directed to approach Mr Pawanshree Agarwal, learned counsel, who is appointed as the Amicus Curiae in the matter to assist the Court and he shall open a web portal so that the homebuyers can give their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an earlier date, shall create a portal within a week and do the needful as he has done in similar matters. Mr Anupam Lal Das, learned counsel shall provide all the details as required by Mr Pawanshree Agrawal. Mr Anupam Lal Das shall provide a sum of Rs. 5 lakhs to Mr Pawanshree Agrawal for creation of the portal and to carry on the consequential activities. Matters be listed on 10-1-2018. On that day, all the independent Directors and promoter Directors of Jaiprakash Associates Limited, shall remain present. Copies of the affidavits deposed by all the five promoter Directors, shall be served on the Central Agency, so that the learned Attorney General can be made aware of that. Call on the date fixed." 20.5. Next to the above, the matter was considered on 15.12.2017, when the deposited INR 150 crores were ordered to be kept in a shortterm deposit and the time (for further payment) was extended until 25.01.2018. Further to that, on 10.01.2018, this Court took note of the submissions made on behalf of the homebuyers of JAL as also an application made by Reserve Bank of India-'RBI' for short seeking leave to move the NCLT against JAL and issued the directions, inter alia, to the ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, where the first instalment of INR 100 crores was to be deposited by 15.04.2018 and the second instalment in the like amount was to be deposited by 10.05.2018. The amicus curiae informed the Court, with reference to his portal and the record of JAL, that a sum of INR 1,300 crores was required to be refunded by way of principal alone to the homebuyers who were seeking refunds, whereupon the amicus was requested to submit a project-wise chart, indicating the number of persons and the stage of completion. Taking note of the grievances of the homebuyers that the developer was demanding monthly instalments despite being unable to complete construction, the developer was restrained from raising demands towards outstanding or future instalments in respect of those buyers who had expressed a desire to obtain refunds. Further to that, the IRP was permitted to finalise the resolution plan, to be implemented only with the leave of the Court. This Court also took note of the inability expressed by the learned senior counsel, who was earlier requested to espouse the cause of homebuyers in CoC and, in his place, Mr. Gaurav Agarwal Advocate was appointed for the purpose. This order dated 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the developer is making demands towards monthly instalments. We direct that no demand towards outstanding or future instalments shall be raised by the developer to the flat buyers who have, as of today, expressed the option to obtain refund. The demands raised by the developer in respect of the homebuyers who have already opted for refund till today, shall remain stayed; (e) The IRP may proceed to finalise the resolution plan but the same shall be implemented after taking leave of this Court. (f) The National Company Law Tribunal (NCLT) shall decide subject to the directions which we have given hereinabove. Before we fix the next date, we must note that we have been apprised that Mr Shekhar Naphade, learned Senior Counsel who was appointed to espouse the cause of the homebuyers before the Committee of Creditors has expressed his inability to continue as such. In view of the aforesaid, a need has arisen to appoint someone else in place of Mr Shekhar Naphade and accordingly we appoint Mr Gaurav Agrawal, Advocate. It is further clarified that Mr Gaurav Agrawal shall be guided by our previous orders. Let the matter be listed on 16-4-2018 so that this Court can take note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the amount is not deposited by 15-6-2018, the statutory proceedings shall continue. As far as Rs. 750 crores, which is lying in deposit is concerned, it has to be disbursed on pro rata basis amongst the homebuyers." (emphasis in bold supplied) 20.9. Thereafter, on 13.07.2018, this Court took note of certain proposals made by JAL, which were opposed by the petitioners. While observing disinclination to entertain such proposals, this Court posted the matters on 16.07.2018 'exclusively for the purpose of considering the issue of the rights of the homebuyers and the capability of JAL and JIL to construct the projects'. 21. After the aforesaid proceedings, the petitions were finally heard and disposed of by this Court by way of the judgement dated 09.08.2018. Before taking note of the significant features and attributes of the final judgement in the case of Chitra Sharma, but to keep feasible track of the chronology of events, we may indicate that parallel to the proceedings in this Court, NCLT continued with CIRP concerning the corporate debtor JIL and in that process, passed orders on 09.05.2018 and 15.05.2018, approving the decision of IRP rejecting the claims of two lenders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the scheme of IBC; and also underscored the fact that though IBC, as originally enacted, did not contain express provisions in relation to the interests of homebuyers but, their concerns were sought to be assuaged in the amendment brought about by the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, which came into force on 06.06.2018 and whereby, the homebuyers were expressly brought within the purview of financial creditors under the IBC. This Court pointed out that now being duly recognised as financial creditors, the homebuyers were necessarily a part of the CoC, constituted in terms of Section 21 IBC. This Court also took note of the relevant provisions in the Regulations relating to the voting share of the respective financial creditors in CoC and selection of an authorised representative-'AR' for short to represent financial creditors in a particular class. 22.2. Proceeding further, this Court extensively referred to a variety of submissions made on behalf of JAL, seeking to explain the perspective of the developers with reference to the projects already accomplished by them and the projects being under execution; and their proposal to deposit post-dated cheques t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adversely impact the credibility of the process under the Code. This Ordinance later on took the shape of the Insolvency and Bankruptcy Code (Amendment) Act, 2017 (No. 8 of 2018) that came into force with retrospective effect from 23.11.2017. This Court, inter alia, observed and explained as under: - "39. Clauses (c) and (g) of Section 29-A would operate as a bar to the promoters of JAL/JIL participating in the resolution process. Under clause (c), a person who at the time of the submission of the resolution plan has an account which has been classified a non-performing asset under the guidelines of RBI or of a financial regulator is subject to a bar on participation for a stipulated period. Under clause (g), a person who has been a promoter or in the management or control of a corporate debtor in which a preferential transaction, undervalued transaction, extortionate credit transaction or fraudulent transaction has taken place and in respect of which an order has been made by the adjudicating authority under the IBC is prohibited from participating. The Court must bear in mind that Section 29-A has been enacted in the larger public interest and to facilitate effective corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of the National Consumer Disputes Redressal Commission as there was no stay. One such order was passed by NCDRC on 2-5-2016, in Developers Township Property Owners Welfare Society v. Jaiprakash Associates Ltd.; 40.5. The contention of JAL that they faced impediments on account of the purported stay imposed by NGT is patently incorrect as the stay by NGT was only on handing over possession without an occupation certificate, which had no bearing on the construction. Moreover, JAL carried out construction during that period as is evidenced inter alia by the fact that they raised demands for construction linked payments during this period; 40.6. During the pendency of the CIRP from 9-8-2017, construction work was done under the aegis of the IRP under whom JAL was a mere contractor; 40.7. The claim by JAL that flats have been delivered is a fractured claim as flats have been delivered in incomplete stages and are not in accordance with the allotment letters. The flooring is not complete, doors and windows are missing, no-objection certificates have not been obtained from the Fire Department and the offer of possession is being made without the occupation certificate; 40.8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eave no manner of doubt that JAL/JIL lack the financial capacity and resources to complete the unfinished projects. To allow them to participate in the process of resolution will render the provisions of the Act nugatory. This cannot be permitted by the Court." (emphasis in bold supplied) 22.4. It was, however, submitted on behalf of JAL/JIL that with expiry of timelines for CIRP, the only option would be to liquidate the corporate debtor which may not be in the interest of homebuyers and in that situation, the only way out would be to provide for an arrangement outside the provisions of IBC. It was also submitted that unless a group of independent professionals came to a conclusion that it was not financially viable for JAL/JIL to complete the remaining work in a time-bound manner, their role as developers should not be discounted. Hence, it was submitted that an independent committee of experts be constituted by the Court to evaluate the financial capability of JAL/JIL to continue executing the ongoing projects. It was also submitted that only 8% of the homebuyers had opted for refunds while 92% had chosen not to claim refunds, thereby implying a confidence in the ability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime that the Ordinance came into being on 6- 6-2018, the period of 270 days had expired; the resolution plan of Lakshdeep was rejected and the IRP informed NCLT that no resolution plan had been approved within the extended period of 270 days on 12-5-2018. 47.2. Having regard to the material change which has been brought about by the amendment of the IBC by the Ordinance and the fact that this Court has been in seisin of the proceedings to ensure that the homebuyers are protected, we are of the view that it is but appropriate and to do complete justice to secure the interests of all concerned that the CIRP should be revived and CoC reconstituted as per the amended provisions to include the homebuyers. In the facts of the present case, recourse to the power under Article 142 would be warranted to render complete justice. Parliament has undoubtedly provided a period of 180 days and an extended period of 90 days to complete the process. But in the present case a peculiar situation has arisen as a result of which the status of the homebuyers which had not been recognised prior to 6-6-2018 has now been expressly recognised as a result of the amending Ordinance. 47.3. The learned co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IBC to enforce the statutory status of the allottees as financial creditors. We also clarify that apart from the three bidders whose bids were found to be eligible by the IRP, it would be open to the IRP to invite fresh bids to facilitate a wider field of choice before the CoC. In that process, the offers made by the intervenors in these proceedings can also be considered by CoC anew. We are not inclined to evaluate the merits of the bids submitted by the bidders who were left in the fray, two of whom have intervened. All bids must follow the discipline IBC. We have, however, not accepted the submission to allow JIL or JAL and the erstwhile promoters to participate in the process. Their participation is expressly prohibited by Section 29-A and we decline to make any exception which would breach a salutary and express provision made in the IBC." (emphasis in bold supplied) 22.5. Thereafter, this Court also took into consideration the submissions made on behalf of some of the homebuyers for issuance of directions to facilitate pro rata disbursement of INR 750 crores lying in deposit pursuant to the interim directions. This Court observed that even when the claim of the refund s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roval of a resolution plan is to form a composite approach to deal with the financial situation of the corporate debtor. Allowing a refund to one class of financial creditors will not be in the overall interest of a composite plan being formulated under the provisions of the IBC. 48.3. Thirdly during the course of the hearing, the Court has been apprised of the concerns of the secured creditors, chief among them being IDBI Bank Ltd. In its submissions before this Court, IDBI Bank has emphasised that one of the major reasons for the enactment of IBC was to protect the interest of lenders. The debt owing to the banks and financial institutions has been secured by the assets of JIL, to protect their interests. This debt originates in the public deposits of the banks and financial institutions, who are answerable to their stakeholders. 48.4. Fourthly, RBI has moved this Court for permission to initiate an insolvency resolution process. Parliament enacted the Banking Regulation (Amendment) Act 2017 by introducing Section 35-AA and Section 35-AB into the Banking Regulation Act 1949. The amendment empowers the Central Government to authorise RBI to issue directions to any banking co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.3. We permit the IRP to invite fresh expressions of interest for the submission of resolution plans by applicants, in addition to the three shortlisted bidders whose bids or, as the case may be, revised bids may also be considered; 50.4. JIL/JAL and their promoters shall be ineligible to participate in the CIRP by virtue of the provisions of Section 29-A; 50.5. RBI is allowed, in terms of its application to this Court to direct the banks to initiate corporate insolvency resolution proceedings against JAL under the IBC; 50.6. The amount of Rs. 750 crores which has been deposited in this Court by JAL/JIL shall together with the interest accrued thereon be transferred to NCLT and continue to remain invested and shall abide by such directions as may be issued by NCLT." (emphasis in bold supplied) 23. Thus, the ternary, of anxiety on the part of stakeholders to avoid liquidation of the corporate debtor JIL; of due recognition by the legislature of the homebuyers as financial creditors; and concern of this Court to do complete justice in the cause while maintaining the discipline of law, led to the improvisation in Chitra Sharma, as noticeable in the preceding paragraphs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.05.2019, called upon the authorities, the representatives of allottees and others to file reply on the necessity to proceed further with CIRP for considering the resolution plan received from the concerned bidder. The IDBI Bank assailed this order of NCLT by way of another appeal before the NCLAT. 25.3. The aforesaid two appeals were decided together by NCLAT by way of its judgment dated 30.07.2019. The NCLAT took note of the fact that no regulation had been framed under the Code as to how the voting share of thousands of allottees (homebuyers) would be counted when all of them fell within the meaning of 'financial creditors' and hence, were the members of CoC. The NCLAT observed that this had been an extraordinary situation where the law was silent and there was no guideline which led to difference of opinion between the two members and the matter was finally decided by the third member. The NCLAT opined that in the given situation, certain period could be excluded while counting the total period of 270 days. In this judgement dated 30.07.2019, NCLAT provided for exclusion of 90 days for the purpose of counting 270 days of CIRP from the date of receipt of the copy of its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or jointly or in concert with any person, but those who are ineligible in terms of Section 29-A, are barred from filing such plan. No liberty is given to "Jaiprakash Associates Ltd.", in view of the aforesaid observation and decision of Hon'ble Supreme Court in Chitra Sharma." 26. The aforesaid judgement of NCLAT was assailed in this Court by JAL and by the Wish Town Homebuyers' Welfare Society. These appeals raised essentially two issues before this Court: one, as to whether NCLT or NCLAT had the power to exclude any period from the statutory period in exercise of inherent powers sans any express provision in the Code in that regard; and second, whether it was open to allow the bidder whose resolution plan had already been rejected by CoC, to submit revised plan or to invite fresh resolution plans to be considered by CoC after the statutory period specified for submission of such plans? 27. After cogitating over the submissions made in support of the appeals, it was clear that the inevitable fallout of accepting the stand taken by the appellants would be to set aside the impugned judgment and relegate the parties to a situation where the only option would be to proceed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly reproduced as under: - "16. Suffice it to note that an extraordinary situation had arisen because of the constant experimentation which went about at different level due to lack of clarity on matters crucial to the decision-making process of CoC. Besides that, in view of the recent legislative changes, the scope of resolution plan stands expanded which may now include provision for restructuring the corporate debtor including by way of merger, amalgamation and demerger and more so the power bestowed on CoC to consider not only the feasibility and viability of the resolution plan but also the manner of distribution proposed, which may take into account the order of priority amongst the creditors. Additionally, the recently inserted Section 12-A enables the adjudicating authority to allow the withdrawal of an application filed under Section 7 or Section 9 or Section 10, on an application made by the applicant with the approval of 90% voting share of the CoC. Similarly, sub-clause (7) of Regulation 36-B inserted with effect from 4-7-2018, dealing with the request for resolution plans unambiguously postulates that the resolution professional may, with the approval of the Committe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India to all concerned to reckon 90 days' extended period from the date of this order instead of the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019. That means, in terms of this order, the CIRP concerning JIL shall be completed within a period of 90 days from today. 20. We do not deem it necessary to dilate on the arguments of the respective counsel for the nature of order that we intend to pass, including about the locus standi of JAL which, in our opinion, already stands answered against JAL by virtue of Section 29-A of the Act as expounded in Chitra Sharma." 29. In the given circumstances, this Court passed the following order for the purpose of substantial and complete justice and in the interest of all the stakeholders: - "21. Accordingly, we pass the following orders to do substantial and complete justice to the parties and in the interest of all the stakeholders of JIL: 21.1. We direct the IRP to complete the CIRP within 90 days from today. In the first 45 days, it will be open to the IRP to invite revised resolution plan only from Suraksha Realty and NBCC respectively, who were the final bidders and had submitted resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and consideration by CoC took place, but culmination of the proposal in approval of the resolution plan got delayed. Hence, IRP filed one miscellaneous application in this Court (M.A. No. 540 of 2020), pointing out various difficulties and unavoidable circumstances which had caused the delay though the proposal was submitted within the time frame prescribed. While accepting the reasons stated in the application so filed by the IRP, this Court, by another order dated 03.02.2020, extended the time by four weeks for approval of the resolution plan. This is how the process of approval of resolution plan culminated in the impugned order dated 03.03.2020 by the Principal Bench of NCLT at New Delhi.- It may be indicated in the passing that later on, a few miscellaneous applications as also interlocutory applications were filed in relation to the case of Chitra Sharma (supra), most of which were disposed of by this Court on 18.12.2019, in view of the aforesaid order dated 06.11.2019. Having regard to the points requiring determination herein, it is not necessary to dilate on those applications. 32. Before dilating on the resolution plan in question, it appears just and proper to narrat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the category of financial creditors of JIL but IRP did not agree and declined to recognise them as such. Being aggrieved, the said banks preferred separate applications under Section 60(5) of the Code before NCLT while asserting their claim to be recognised as financial creditors of the corporate debtor JIL, on account of the securities provided by JIL for the facilities granted to JAL. The NCLT rejected the applications so filed by the said banks, by way of its orders dated 09.05.2018 and 15.05.2018, while concluding that on the strength of the mortgage created by the corporate debtor JIL, as collateral security of the debt of its holding company JAL, the lenders of JAL could not be categorised as financial creditors of JIL. The appeals filed by the aggrieved lenders of JAL against the said orders dated 09.05.2018 and 15.05.2018 were purportedly allowed as per the result recorded in the impugned order dated 01.08.2019. Aggrieved, one of the lenders of the corporate debtor JIL preferred an appeal in this Court, while asserting that such mortgagees could not be taken as financial creditors of the corporate debtor JIL. 34. The aforesaid two appeals, relating to avoidance of pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L was examined independent of the findings that the transactions in question were hit by Section 43 of the Code, with the following observations: - "34.4. We may, of course, reiterate that in view of the conclusion that we have reached in relation to the principal issue, the transactions in question are denuded of their value and worth, per the force of the order by NCLT under Section 44 of the Code, which has been approved by us. To be most specific, the security interests created by the corporate debtor JIL over the properties in question stand discharged in whole. Therefore, the respondent lenders cannot claim any status as creditors of the corporate debtor JIL and there could arise no question of their making any claim to be treated as financial creditors as such. However, for its relevance, we deem it appropriate to determine the issue as to whether the lenders of JAL, because of creation of the mortgages in question, could be treated as financial creditors of JIL, independent of the finding that the transactions in question are hit by Section 43 of the Code." 34.3. Thereafter, this Court dealt with the rival submissions relating to the status of such lenders of JAL and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the first 45 days, it would be open to the IRP to invite revised resolution plans only from the two applicants namely Suraksha Realty and NBCC, who were the final bidders and had submitted resolution plans on the earlier occasion, and to place the revised plan(s) before the CoC. 38.1. From the facts stated before us, it is borne out that the revised resolution plans were called from the said applicants and were placed for consideration in the 16th Meeting of CoC held on 07.12.2019. Having considered the resolution plans, the members of CoC requested the resolution applicants to improve their offers and thereupon, both the resolution applicants agreed to submit addendums to their revised resolution plans. Accordingly, Suraksha Realty submitted an addendum to the resolution plan on 07.12.2019 and NBCC submitted its addendum to the resolution plan on 08.12.2019. Then, with the certificate dated 08.12.2019 from IRP that the resolution plans submitted by Suraksha Realty and NBCC were fully compliant under Section 30(3) of the Code read with Regulation 39(2) of the CIRP Regulations, the plans along with the respective addendums were put to e-voting from 9 a.m. of 10.12.2019, until 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p of Yamuna Expressway including, the remaining concession rights of Yamuna Expressway. Yamuna Expressway will be hived off into a SPV. Expressway SPV will raise fresh borrowings of INR 2,200 Crore and pay it to JIL as part of the consideration for transfer of Expressway. This money will be used by NBCC for construction of units. 2 Allottees of Real Estate 9,588 (Principal amount) Allottees to get completed units as per Schedule A, which ranges from 9 months to 42 months from date of transfer to NBCC. No delay penalty to be paid for past delays units to be constructed and delivered by NBCC. NBCC will pay Delay Penalty @ INR 5 per sq. ft./per month only if there is delay in delivery of more than 1 year from the delivery dates mentioned in Schedule A subject to Force Majeure event. Allottees who have not filed their Claims (Approx. 2,100 in number) shall be treated in a manner similar to other allottees and will be provided units, subject to customary check for compliances and KYC of the customers. 3 Fixed Deposit Holders 29 Note: FD holders of approx. 90 Crore did not file Claims. 100% upfront payment of FD Holders' (only such Claims of FD Holders as are forming part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mplementation process, by way of a flow chart, various steps have been indicated which include formation of different SPVs; raising of fresh debts of about INR 2,000 crores by securitisation of Yamuna Expressway; transfer of rights of Yamuna Expressway against equity shares and debt disbursement; transfer of 1,526 acres of land worth INR 5,001 crores, bank loan of INR 5,000 crores and issuance of equity of INR 1 crore; diversification of JHL; infusion of INR 120 crores equity etc. etc. 39.2.1. The IRP has, in this summary, also indicated other key implementation provisions, most of which are the matters of contention in this litigation. That summary reads as under: - "Other key implementation provisions - Deemed approval of YEIDA for transfer of Land and Toll road to designated SPV's without incurring any cost such as stamp duty, transfer charges, Etc. - Liability for additional farmer compensation (presently sub-judice) not payable by JIL. Alternatively, if found payable, YEIDA to collect is directly from end user. - Transfer of INR 750 crores (plus interest) deposited by JAL, pursuant to the order of the Hon'ble Supreme Court to be transferred to JIL and to be used ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (subsequently this amount has reduced to approx. INR 500 crore) INR 716 Cr was advanced to JAL towards construction work and maintenance charges/deposit. This amount of INR 716 Cr outstanding from JAL shall also be available to JIL for the purpose of completion of flats to the Home Buyers and other associated purposes. In case the relief is not granted, the assets currently owned by the JIL and being used by the home buyers of JAL relating to maintenance, shall not be available to the home buyers of JAL with effect from the Approval Date. 7. Additional FAR appeal by YEIDA YEIDA to withdraw the appeal filed in the District Court, Gautam Budh Nagar challenging the award dated 23.1.2017 passed by arbitral tribunal pertaining to additional FAR and JIL to get the right to use additional FAR as per the Resolution Plan. 8. Additional Compensation to erstwhile land owner (for both real estate parcels and land acquired for toll road) Any Claim/claim of YEIDA in future w.r.t. the land acquired and transferred to JIL by YEIDA (in terms of the Concession Agreement), if any, shall only be recoverable by YEIDA directly from the actual lease holders (i.e. the sublessees) on such da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gregating to a minimum of INR 2,000 Cr ("Fresh Debt") from the Expressway Lenders by securitizing future cash flows of the Expressway 5. Payment of unpaid CIRP Costs Within 90 days of Approval Date 6. Payment of the Operational Debt to Operational Creditors (other than the workmen dues as above) of the Corporate Debtor INR 20 Cr or the liquidation value, if any due to the Operational Creditors in terms of Sections 30 and 53 of the Code (other than the workmen dues as above), whichever is higher, shall be paid in full before any payment to the Financial Creditors. 7. Payment of transferred/novated debt of INR [Fresh Debt - (less) 2000 Cr] by Expressway SPV to the Institutional Financial Creditors 8. Payment of an amount not exceeding INR 29 Cr forming part of the Admitted Financial Debt to FD Holders subject to conditions as specified in the Resolution Plan Within 90 days of Approval Date 9. Payment of INR 2,000 Cr. by Expressway SPV to the Corporate Debtor towards part redemption of optionally/non-convertible debentures Within 90 days of the Approval Date 10. Conversion of Admitted Financial Debt (due to Institutional Financial Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... analogously; and the Adjudicating Authority has, by its order dated 03.03.2020, proceeded to approve the plan with a few modifications and with certain directions. This order dated 03.03.2020 is the matter of challenge for one reason or another by the parties before us. For their relevance, it would be appropriate to take note of the salient features of this order in necessary details. Order dated 03.03.2020 by the Adjudicating Authority in approval of the resolution plan with modifications 41. The order dated 03.03.2020, as passed by NCLT in exercise of its jurisdiction under Section 31 of the Code, could be reasonably divided in five segments. In the first place, the NCLT recounted the relevant background aspects leading to the CIRP in question and the orders passed by this Court in the aforementioned three rounds of litigation in the cases of Chitra Sharma, Jaiprakash Associates Ltd. and Anuj Jain (supra). Secondly, the NCLT dealt with the issue relating to the said INR 750 crores deposited by JAL in terms of the interim orders passed by this Court in the case of Chitra Sharma and which was to abide by the directions of NCLT in terms of the final judgement in Chitra Sharma. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the principles enshrined in Sections 77 and 83 of the Indian Trusts Act. It was further submitted that since the Supreme Court had nowhere directed either to pay the remaining balance or to utilise this money towards refund of homebuyers' money, it had to be treated as the money of JAL and returned accordingly. It was also submitted that as per CIRP Regulations 36 and 37, only the properties of the corporate debtor were subject to the resolution process and the amount deposited by JAL, being not the asset of the corporate debtor, was required to be returned. Such submissions of JAL were duly supported by ICICI Bank, the leader of the consortium of banks, who had lent money to JAL and it was further submitted that in the case of Chitra Sharma (supra), the Supreme Court directed the promoters of JAL to deposit INR 2,000 crores in order to ensure that the homebuyers were not left remediless and their money could be refunded but after amendment to IBC, the Supreme Court neither ordered such refund nor insisted upon the promoters of JAL to deposit the remaining balance of INR 1,250 crores, but simply delegated this work to the NCLT to proceed with CIRP and to approve the resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y IRP that as per the orders passed by this Court in Chitra Sharma (supra), this money was intended to protect the interests of homebuyers only. It was also pointed out that as per the tripartite agreement involving JAL, JIL and homebuyers, JAL was the developer of the project and was responsible for delivering possession of flats to the homebuyers. The IRP also referred to various orders passed by this Court in the course of proceedings in the case of Chitra Sharma as also a settlement proposal given by JAL on 15.02.2019, stating that the said sum of INR 750 crores was to be utilised towards revival of the business of JIL irrespective of the outcome of legal proceedings. In the backdrop of these facts and circumstances, it was submitted that the said amount being for the cause of homebuyers, it was not open to JAL or its lenders or promoters or homebuyers to seek reopening of the issue concluded by the decision of this Court. 43.3. Having noticed the length and breadth of the arguments on the two sides, where one was supporting for utilisation of the said amount of INR 750 crores and accrued interest for the benefit of the homebuyers of JIL and where other side was arguing for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of JAL. On reading all the orders of the Hon'ble Supreme Court, all that could be ascertained is the Hon'ble Supreme Court endeavoured to claw back the homebuyers' money from JIL and JAL. In that pursuance, JAL deposited Rs. 750 crore. The only criteria for not distributing this Rs. 750 crore to the homebuyers is that only 8% of the homebuyers sought for refund of the money whereas 92% homebuyers have asked for flats, therefore to avoid preferential treatment, this issue has been relegated to the NCLT to deal with in accordance with IBC. One more fact is, though Hon'ble Supreme Court initially stayed the proceedings of CIRP, subsequently vacated the stay and allowed the IRP to proceed with CIRP. 52. In the backdrop of these facts and in the light of submissions made by either side, let us see what the Honourable Supreme Court held in Chitra Sharma "Directing disbursement of the amount of Rs. 750 Crore to the Homebuyers who seek refund would be manifestly improper and cause injustice to the Secured Creditors since it would amount to preferential treatment to a class of creditors" (Para 48.1 of Chitra Sharma case (2018) 18 SCC). This being the observation, now the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined, we will know that trust is a relationship where property/money held by one party for the benefit of another party. Trustee holds the property/money for the benefit of the trust beneficiaries. Trustee is under fiduciary duty to ensure that the property of the owner is maintained and the benefit thereof is reached to the persons to whom it is intended to. In the case of trust, the owner is under no obligation to pass on the benefit to the beneficiary, therefore, the owner/settler being the owner of the property, he is entitled to take it back in the event it is not utilized for the purpose the owner intended to. But that is not the case when money from the Debtor or on behalf of the Debtor has gone out towards discharge of an obligation. In the case of trust, ownership of that property or money remains with the owner as long as it is not utilized for the purpose intended to. That owner has no obligation to part with his property/money. 59. In case of homebuyers' issue, once homebuyers entered into an agreement with a developer and when their relations entered into turbulence and not in a position to become normal, the relation in between them will become creditor and debto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to say that it is JAL's money. 63. As to the argument saying that for Rs. 750 Crore has not gone into the books of Corporate Debtor (JIL), therefore it cannot be treated as the asset of JIL, when money has been deposited on the directions of Honourable Supreme Court and that has not been returned by Honourable Supreme Court, we are only limited to understand that the Honourable Supreme Court has not refunded the money because refunding to a few creditors in preference to other creditors would become a preferential treatment, therefore such observation cannot be extrapolated to say that the Hon'ble Supreme Court has refused to refund the money on the assumption that this money has to go back to JAL. 64. If we see the situation in the perspective of the historical facts, it is evident that homebuyers paid money, JIL and JAL failed to deliver homes to the homebuyers, therefore the obligation lies upon JIL to satisfy that obligation either by refunding the money or by delivering homes to the homebuyers, for neither of the things being done, the money having passed from JIL to JAL, and part of it having come back as per the orders of the Hon'ble Supreme Court, now it is not open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where NBCC was attempting to acquire JIL having worth of about INR 8,257 crores for a petty sum of INR 120 crores; that the resolution plan was a contingent one where NBCC reserved its right to withdraw if the said sum of INR 750 crores was not treated as part of the resolution plan and JIL was not discharged of PMLA and other investigations; that the approval was inconsistent with Section 11(4)(g) of RERA; that simultaneous voting on two resolution plans was not permissible in law; that the resolution applicant wrongly suggested that there was no haircut in the proposed settlement of dues of financial creditors because the haircut was as far high as INR 6,101 crores which was 62.36% of the debt of INR 9,783 crores. These contentions were countered by IRP with the submissions that the promoters of JAL and JIL had no locus to question the offer accepted by the CoC and as per the decision of this Court in the case of Maharashtra Seamless Limited v. Padmanabhan Venkatesh and Ors. (C.A. No. 4242 of 2019)- Since reported as (2020) 11 SCC 467, no provision in the Code required the resolution applicant to match the liquidation value; that no provision in the Code prevented simultaneous v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' arguments cannot be seen as a point having bearing on the resolution plan approved by the CoC. 74..........This objection over simultaneous voting per se does not look as an act in violation of the Code or Regulations thereto. No provision has envisaged that two plans should not be put to voting. Moreover there is no mandate that if two plans are put to voting, the plan voted in favour to be declared non est in law. Doctrine of severance could be applied by validating the action doable under the law as valid. If any excess has happened, such excess can be taken out. Besides this, both the plans are not approved. In addition to it, unsuccessful Resolution Applicant has no grievance to the plan present before us. 75. With regard to RERA issue, the IRP submits that the Hon'ble Supreme court in para 28 of Pioneer Urban Land & Infrastructure Limited & anr. Vs. Union of India & Ors. (WP (c) no. 43 of 2019) held that RERA and IBC must be held to co-exist and be interpreted harmoniously and in the event of clash, RERA must give way to IBC. 76. When the home-buyers, who are entitled to raise RERA objection themselves have voted in favour of the plan, RERA violation if any, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s only provided for the priority of payment to the dissenting financial creditors before the assenting financial creditors and the mode of payment to be in cash was not mentioned; that when the assenting financial creditors were not being paid in cash and had accepted equity and land parcels, payment to the dissenting financial creditors in cash would cause prejudice to the rights of the assenting financial creditors. Meaning of the word "payment" in Black's Law Dictionary was also cited and it was argued that the money or other valuable thing delivered to discharge the obligation is to be construed as payment under Section 30(2) of the Code. 46.1. While dealing with the rival submissions in relation to this claim of the dissenting financial creditor, the NCLT referred to the binding nature of agreement between JIL and the said creditor as also the rights of a dissenting financial creditor in terms of Sections 30(2) and 53 of the Code and concluded that the only recourse available was payment in cash to such dissenting financial creditor a sum equivalent to the liquidated sum he would be entitled to receive under Section 53 of the Code. The NCLT said,- "91. If you come to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall remain bound to the plan; and when a particular issue was governed by law, something not present in the law could not be thrust upon any party under the cover of equity. The NCLT, thereafter, proceeded to analyse the requirements of Section 30(2) of the Code with Section 53 and Regulation 38 of the CIRP Regulations; and also examined its powers to deal with those aspects of the resolution plan which were not compliant with Section 30(2) of the Code. Having examined and analysed thus, the NCLT held that when the resolution plan is found non-compliant with Section 30(2), the IRP or the resolution applicant cannot say that the approval being within the ambit of commercial wisdom of CoC, all what was decided by CoC was binding on the dissenting financial creditor; and it was within its (NCLT's) jurisdiction to modify the plan so as to make it compliant with the requirements of law without altering its basic structure. The NCLT observed and held as under: - "98. If section 30(2) (b) (ii) is carefully examined, and read in the context of the said clause, it is clear that payment will be the amount to be paid to the financial creditors under Section 53 of the code, because it is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e NCLT observed that the two aspects which were made the basic conditions by the resolution applicant namely, getting the said sum of INR 750 crores and extinguishing of PMLA proceedings were duly taken care of, respectively by the decision in relation to the said corpus of INR 750 crores and by the amendment of law. The NCLT further observed that for the sake of viability and feasibility, the plan could be modified to make it compliant with Section 30(2) of the Code. Having said so, NCLT proceeded to modify the terms of resolution plan in the manner that the resolution applicant shall pay to the dissenting financial creditor the amount receivable in terms of Section 53 of the Code in twelve monthly instalments along with interest starting from six months from the date of order with default conditions of interest. The NCLT ordered as under: - "103. In view of the same, for the sake of viability and feasibility of the plan, we hereby modify this plan to make it in compliance with the section 30(2) (b) (ii) of the code by holding that the Resolution Applicant shall pay to ICICI an amount that it is entitled to receive u/s 53 of the code within 18 months from the date of approval of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne being of acquisition cost payable by the concessionaire and another being of lease rent, which could be paid by the sub-lessee/end-user as the case may be. It was submitted that given such components, the IRP or the resolution applicant could not insist that YEIDA has to collect the acquisition cost directly from the end-users. It was also submitted that even if the land utilised for Expressway was to revert to YEIDA after 36 years, the CA nevertheless provided as key components that the concessionaire would collect toll for this period and has to bear all the cost including the cost of acquisition; and there was no exemption as regards the land of Expressway. It was also submitted that the resolution applicant cannot split the transferred land into two and say that the payment of additional compensation would be applicable to the land used for development alone. It was further submitted that in view of Clause 18.1 of CA, in case of the necessity to transfer the concessionaire's rights and obligations to an SPV, there has to be necessary documentation involving YEIDA, the concessionaire and the SPV incorporated, so that YEIDA could keep exercising its rights over the SPV con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings and directions of YEIDA in regard to this issue read as under: - "118. On hearing the submissions of either side, with regard to payment of additional compensation, in the event any direction has been given in the arbitration proceedings to the Corporate Debtor to pay additional compensation, as per concession agreement, additional cost shall be paid by the concessionaire. We don't go into the point as to whether additional compensation is part of the acquisition cost because i.e. a point already Adjudicated by the Arbitral Authority and the issue is pending before the Hon'ble High Court of Delhi, now the limited point to be dealt with is, as to whether such compensation, if directed to be paid, is to be paid by the concessionaire or by the end users. 119. As said above, there are two payment components come from the concessionaire one is acquisition cost, two is the lease rentals. In the concession agreement, it is obvious that acquisition cost (actual cost) shall be paid by the concessionaire, as to lease rentals are concerned, it has been dealt with in detail that lease rentals could be collected either from sub-lessee or from the end users, wherever the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded to deal with the other issues relating to the fixed deposit holders, some of the aggrieved homebuyers, YES Bank and the agreement holders. 48.1. As regards fixed deposit holders, the NCLT provided that the resolution applicant shall make a provision to clear their dues as and when the unclaimed fixed deposit holder claims it, and this right will remain in force as long as they were entitled to claim under the Companies Act, 2013. These directions of NCLT in the impugned order read as under: - "125. Regarding FD holders payments who have not made claims which have been reflected in the records of the Corporate Debtor, the Plan Applicant shall make a provision to clear their dues as and when the unclaimed FD holder claims it, and this right will remain in force as long as they are entitled to claim under Companies Act 2013." 48.2. The NCLT also took note of the submissions of some of the homebuyers who were not agreeing with the resolution plan in question. Those dissatisfied homebuyers submitted that the timelines given in the resolution plan for completion of flats were not workable; there was no clause for refund of money in the event flats not being completed within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Health Care subsidiary of JIL, has also raised an objection against dealing with the shares of the Health Care belonging to the Corporate Debtor. However, since the Resolution Applicant and YES Bank having agreed for constitution of a Committee to deal with the shares and assets of the subsidiary company, we are under no obligation to discuss this issue any further." 48.4. As regards the right reserved by the resolution applicant to cancel the transactions where certain parcels of land were transferred by the corporate debtor without proper agreement/sub-lease deed, NCLT noticed the submission made by such agreement holders that the agreements were executed by the corporate debtor in the normal course of its business prior to the commencement of CIRP and monies were also advanced; and therefore, such agreements could not be terminated unilaterally. The NCLT also noticed the counter submissions by IRP and NBCC that the agreements allegedly executed between the corporate debtor and the agreement holders had not been determined, but the resolution applicant has reserved its right to cancel such instruments wherever the corporate debtor had entered into deals without proper agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng out of past claims prior to CIRP initiation shall not have any bearing on this corporate debtor from hereof. Clause No. 11:- The lenders to the corporate debtor shall regularise all the accounts and ensure that such classification of the loan account is standard in their books with effect from the transfer dates. Clause No. 12:- All claims which have been placed before the RP and any criminal proceedings appurtenant to those claims are hereby extinguished. Clause No. 13:- As to the contracts relating to the development of land by JAL, the Resolution applicant can reserve its right to terminate the same, as to the claims, if any, the resolution applicant has right to take appropriate action against JAL. Clause No. 14:- With regard to liability arising out of concession agreement in relation to YEIDA, since those issues are governed by concession agreement, this Bench cannot nullify the rights of YEIDA against the corporate debtor emanating from the concession agreement. Clause No. 15:- The agreements for subleases executed between the corporate debtor and the third parties, which are not in accordance with law and not supported by material proof, the Resolution app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherever required. We need not elaborate on all such observations but could usefully point out the rejection of two such applications. 50.1. One such application was filed by a financer of one of the homebuyers seeking its induction in the CoC. This application was dismissed as misconceived in the following words: - "CA-74/2019 filed by PNB Housing Finance Ltd. for directions to the IRP to induct this applicant in the CoC and if any amount is refunded to the home-buyers, the amount due to the applicant ought to be paid to this applicant because it is the lender to the home-buyers. This application is dismissed as misconceived, as the lender to the home-buyers will not have any right to be financial creditors of the CD." 50.2. Another application was filed by three homebuyers seeking the relief of quashing the minutes of CoC dated 01.03.2019; for direction to conduct a forensic land audit of the corporate debtor; and for various directions to IRP, like those for taking legal opinion on Concession Agreement, analysis of Expressway cost escalation, providing information and answers to the queries of homebuyers etc. etc. The NCLT noted the propositions of these applicants and dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority held that payment to such dissenting financial creditor shall be made in cash, as per the amount it would be entitled to under Section 53 of the Code, in the form of twelve monthly instalments with interest to be accrued six months post the order. It was also observed by the Adjudicating Authority that it had the necessary jurisdiction to modify the resolution plan to make sure it complied with Section 30(2) of the Code, so long as its basic structure was not altered. (c) As regards the objections by YEIDA, the Adjudicating Authority held that YEIDA shall have the right to collect the acquisition cost through the SPVs proposed to be incorporated so as to make the resolution plan compliant with the terms of the Concession Agreement; however, the Adjudicating Authority refrained from adjudicating on the issue of additional compensation in relation to the land under Expressway and left it for the parties to take appropriate action at the appropriate stage. The Adjudicating Authority also held that for transfer of rights and obligations to the two SPVs, necessary documents shall be executed involving the concessionaire (JIL), YEIDA and the SPV concerned. These ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of constitution of an Interim Monitoring Committee for implementation of the plan in question. The said order dated 22.04.2020, being also a subject of challenge in this batch, could be usefully noticed to complete the narrative. 54. The resolution applicant NBCC preferred an appeal against the aforesaid order dated 03.03.2020 insofar as it felt aggrieved of the modifications in the resolution plan. In that appeal, the NCLAT, while issuing notice to the unrepresented parties, directed that the approved resolution plan may be implemented subject to the outcome of appeal but at the same time, it was also provided that IRP may constitute an Interim Monitoring Committee comprising of the successful resolution applicant (NBCC) and three major institutional financial creditors, who were the members of CoC. This impugned interim order dated 22.04.2020 reads as under: - "22.04.2020 The Appellant - NBCC (India) Ltd., which has emerged as the Successful Resolution Applicant in 'Corporate Insolvency Resolution Process' initiated against Jaypee Infratech Ltd. (JIL) is aggrieved of modifications made by the learned Adjudicating Authority in the 'Resolution Plan' submitted by it and as appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be deemed reasonable by the 'Interim Monitoring Committee' from the date of this order. If any fee is outstanding for the past services rendered by the Resolution Professional during the 'Corporate Insolvency Resolution Process', the same shall be paid as per the decision of the 'Committee of Creditors'. These directions will last till the disposal of this Appeal. List the matter for 'admission after notice' on 15th May, 2020." The relevant statutory provisions 55. Having taken note of the parties and their respective interests; the principal points for determination; the relevant factual and background aspects, particularly with reference to the three decisions of this Court dated 09.08.2018, 06.11.2019 and 26.02.2020; the salient features of the resolution plan; and key aspect of the orders impugned, we may now go through the provisions that would be relevant for determination of the points arising in this batch of matters. 56. While the expressions generally used in the Code are defined in Section 3 but then, the expressions employed for the purpose of Part II of the Code, dealing with insolvency resolution and liquidation of corporate persons, are defined in Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; This Explanation was inserted by Act 26 of 2018 w.r.e.f. 06.06.2018 [Explanation.- For the purposes of this sub-clause,- (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capacity of a financial creditor of the corporate debtor. Prior to this amendment, such an allottee was sought to be regarded only as an 'other creditor' and that had been the principal cause behind the litigation in this Court in Chitra Sharma (supra). For a complete and meaningful understanding of this Explanation inserted to Section 5(8)(f) of the Code, it would be in concordance to take note of the meanings assigned to the expressions "allottee" and "real estate project" in RERA. The referred clauses (d) and (zn) of Section 2 of RERA read as under: - "Section 2(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 person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent; Section 2(zn): "real estate project" means the development of a building or a building consisting or apartments, or converting an existing building or a part thereof into apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittee of creditors; (e) file information collected with the information utility, if necessary; and (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including- (i) assets over which the corporate debtor has ownership rights which may be located in a foreign country; (ii) assets that may or may not be in possession of the corporate debtor; (iii) tangible assets, whether movable or immovable; (iv) intangible assets including intellectual property; (v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies; (vi) assets subject to the determination of ownership by a court or authority: (g) to perform such other duties as may be specified by the Board. Explanation.-For the purposes of this [section]- Substituted by Act 26 of 2018, sec. 14, for "sub-section" (w.r.e.f. 06.06.2018), the term "assets" shall not include the following, namely:- (a) assets owned by a third party i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the corporate debtor owes financial debts to two or more financial creditors as part of a consortium or agreement, each such financial creditor shall be part of the committee of creditors and their voting share shall be determined on the basis of the financial debts owed to them. (4) Where any person is a financial creditor as well as an operational creditor,- (a) such person shall be a financial creditor to the extent of the financial debt owed by the corporate debtor, and shall be included in the committee of creditors, with voting share proportionate to the extent of financial debts owed to such creditor; (b) such person shall be considered to be an operational creditor to the extent of the operational debt owed by the corporate debtor to such creditor. (5) Where an operational creditor has assigned or legally transferred any operational debt to a financial creditor, the assignee or transferee shall be considered as an operational creditor to the extent of such assignment or legal transfer. (6) Where the terms of the financial debt extended as part of a consortium arrangement or syndicated facility provide for a single trustee or agent to act for all financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken by a vote of not less than fiftyone per cent. of voting share of the financial creditors: Provided that where a corporate debtor does not have any financial creditors, the committee of creditors shall be constituted and shall comprise of such persons to exercise such functions in such manner as may be specified. (9) The committee of creditors shall have the right to require the resolution professional to furnish any financial information in relation to the corporate debtor at any time during the corporate insolvency resolution process. (10) The resolution professional shall make available any financial information so required by the committee of creditors under sub-section (9) within a period of seven days of such requisition. This Section 24 has also undergone a few changes in its amendment by Act 26 of 2018 w.r.e.f. 06.06.2018 which are essentially of sequel to the amendment of Section 21. Section 24. Meeting of committee of creditors.-(1) The members of the committee of creditors may meet in person or by such electronic means as may be specified. (2) All meetings of the committee of creditors shall be conducted by the resolution professional. (3) The reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the approval of the committee of creditors under section 28; (d) appoint accountants, legal or other professionals in the manner as specified by Board; (e) maintain an updated list of claims; (f) convene and attend all meetings of the committee of creditors; (g) prepare the information memorandum in accordance with section 29; This clause (h) was substituted by Act 8 of 2018, sec. 4, w.r.e.f. 23.11.2017. Clause (h), before substitution, stood as under: "(h) invite prospective lenders, investors, and any other persons to put forward resolution plans;". [(h) invite prospective resolution applicants, who fulfil such criteria as may be laid down by him with the approval of committee of creditors, having regard to the complexity and scale of operations of the business of the corporate debtor and such other conditions as may be specified by the Board, to submit a resolution plan or plans.] (i) present all resolution plans at the meetings of the committee of creditors; (j) file application for avoidance of transactions in accordance with Chapter III, if any; and (k) such other actions as may be specified by the Board. This Section 25A was inserted by A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Explanation.-For the purposes of this section, the "electronic means" shall be such as may be specified. This Section 30 has undergone various changes in its amendments by Acts 8 of 2018, 26 of 2018 and 26 of 2019. Several aspects relating to the requirements of Section 30 have formed the matters of contention herein. For their relevance, all the concerned amendments are being indicated Section 30. Submission of resolution plan.-(1) A resolution applicant may submit a resolution plan - Inserted by Act 26 of 2018, sec. 23(i) (w.r.e.f. 06.06.2018) [along with an affidavit stating that he is eligible under section 29 A] to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the - Substituted by Act 26 of 2018, sec. 23 (ii)(A), for "repayment" (w.r.e.f. 06.06.2018) [payment] of other debts of the corporate debtor; Substituted by Act 26 of 2019, sec. 6(a), for clause (b) (w.e.f. 16.08.2019). Earlier clause (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forms to such other requirements as may be specified by the Board. Inserted by Act 26 of 2018, sec. 23(ii)(B) (w.r.e.f. 06.06.2018) [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.] (3) The resolution professional shall present to the committee of creditors for its approval such resolution plans which confirm the conditions referred to in sub-section (2). Substituted by Act 8 of 2018, sec. 6, for sub-section (4) (w.r.e.f. 23.11.2017). Sub-section (4), before substitution, stood as under: "(4) The committee of creditors may approve a resolution plan by a vote of not less than seventy five per cent of voting share of the financial creditors." [(4) The committee of creditors may approve a resolution plan by a vote of not less than Substituted by Act 26 of 2018, sec. 23(iii)(a) for "seventy-five" (w.r.e.f. 06.06.2018) [sixty-six] per cent. of voting share of the financial creditors, afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. For their relevance, all the concerned amendments of this Section 31 are also indicated Section 31. Approval of resolution plan.-(1) If the Adjudicating Authority is satisfied that the resolution plan as approved by the committee of creditors under sub-section (4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, Inserted by Act 26 of 2019, sec. 7 (w.e.f. 16.08.2019) [including the Central Government, any State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed,] guarantors and other stakeholders involved in the resolution plan: Inserted by Act 26 of 2018, sec. 24(a) (w.r.e.f. 06.06.2018) [Provided that the Adjudicating Authority shall, before passing an order for approval of resolution plan under this sub-section, satisfy that the resolution plan has provisions for its effective implementation.] (2) Where the Adjudicating Authority is satisfied that the resolution plan d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; (iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or (v) the resolution plan does not comply with any other criteria specified by the Board. (4) An appeal against a liquidation order passed under section 33 may be filed on grounds of material irregularity or fraud committed in relation to such a liquidation order. Section 53. Distribution of assets.-(1) Notwithstanding anything to the contrary contained in any law enacted by the Parliament or any State Legislature for the time being in force, the proceeds from the sale of the liquidation assets shall be distributed in the following order of priority and within such period and in such manner as may be specified, namely:- (a) the insolvency resolution process costs and the liquidation costs paid in full; (b) the following debts which shall rank equally between and among the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable at the relevant time as follows: - "This Regulation 16A was inserted w.e.f. 04.07.2018 16A. Authorised representative.-(1) The interim resolution professional shall select the insolvency professional, who is the choice of the highest number of financial creditors in the class in Form CA received under sub-regulation (1) of regulation 12, to act as the authorised representative of the creditors of the respective class: Provided that the choice for an insolvency professional to act as authorised representative in Form CA received under subregulation (2) of regulation 12 shall not be considered. (2) The interim resolution professional shall apply to the Adjudicating Authority for appointment of the authorised representatives selected under sub-regulation (1) within two days of the verification of claims received under sub-regulation (1) of regulation 12. (3) Any delay in appointment of the authorised representative for any class of creditors shall not affect the validity of any decision taken by the committee. (4) The interim resolution professional shall provide the list of creditors in each class to the respective authorised representative appointed by the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) curing or waiving of any breach of the terms of any debt due from the corporate debtor; (f) reduction in the amount payable to the creditors; (g) extension of a maturity date or a change in interest rate or other terms of a debt due from the corporate debtor; (h) amendment of the constitutional documents of the corporate debtor; (i) issuance of securities of the corporate debtor, for cash, property, securities, or in exchange for claims or interests, or other appropriate purpose; (j) change in portfolio of goods or services produced or rendered by the corporate debtor; (k) change in technology used by the corporate debtor; and (l) obtaining necessary approvals from the Central and State Governments and other authorities. This Regulation 38 has also undergone several changes. The relevant amendments to subregulation (1) and (3) are separately indicated hereinbelow. That apart, sub-regulation (1A) was inserted w.e.f. 05.10.2017 and sub-regulation (1B) was inserted w.e.f. 24.01.2019 38. Mandatory contents of the resolution plan.- Sub-regulation (1) was amended w.e.f. 04.07.2018; then was substituted w.e.f. 05.10.2018; and then was again substituted w.e.f. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.2018. Before 04.07.2018, sub-regulation (1) stood as under: - "(1) A resolution applicant shall submit resolution plan(s) prepared in accordance with the Code and these regulations to the resolution professional within the time given in the invitation made under clause (h) of sub-section (2) of section 25." [(1) A prospective resolution applicant in the final list may submit resolution plan or plans prepared in accordance with the Code and these regulations to the resolution professional electronically within the time given in the request for resolution plans under regulation 36B along with- (a) an affidavit stating that it is eligible under section 29A to submit resolution plans; Clause (b) was omitted w.e.f. 05.10.2018. Before omission, it stood as under: "(b) an undertaking that it will provide for additional funds to the extent required for the purposes under sub-regulation (1) of regulation 38; and" [***] (c) an undertaking by the prospective resolution applicant that every information and records provided in connection with or in the resolution plan is true and correct and discovery of false information and record at any time will render the applicant ineligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be considered approved if it receives requisite votes. (3B) Where two or more resolution plans are put to vote simultaneously, the resolution plan, which receives the highest votes, but not less than requisite votes, shall be considered as approved: Provided that where two or more resolution plans receive equal votes, but not less than requisite votes, the committee shall approve any one of them, as per the tie-breaker formula announced before voting: Provided further that where none of the resolution plans receives requisite votes, the committee shall again vote on the resolution plan that received the highest votes, subject to the timelines under the Code." [(3) The committee shall evaluate the resolution plans received under sub-regulation (1) strictly as per the evaluation matrix to identify the best resolution plan and may approve it with such modifications as it deems fit: Provided that the committee shall record its deliberations on the feasibility and viability of the resolution plans.] This sub-regulation was substituted for the earlier one w.e.f. 04.07.2018 and was also amended w.e.f. 24.01.2019. [(4) The resolution professional shall endeavour to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated value of the liquid assets under subregulation (2) is less than the estimated liquidation costs under subregulation (1), the committee shall approve a plan providing for contribution for meeting the difference between the two. (4) The resolution professional shall submit the plan approved under sub-regulation (3) to the Adjudicating Authority while filing the approval or decision of the committee under section 30 or 33, as the case may be. Explanation.-For the purposes of this regulation, 'liquidation costs' shall have the same meaning as assigned to it in clause (ea) of subregulation (1) of regulation (2) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. 60. We would hasten to reiterate that in the foregoing extractions of the provisions, we have indicated the amendments/substitutions/insertions in the related footnotes to the extent relevant for the present purpose; and not necessarily all the changes as brought about from time to time. JIL's CIRP: Chronicle of complications 61. The factual and background aspects relating to this batch of matters make it evident that the insolvency resolution of the corporate debtor JIL carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the corporate debtor and the major part of activities relating to construction of flats and issuing Offers of Possession which, according to the IRP, has resulted in reduction of liability to the real estate allottees. The relevant paragraphs of this affidavit read as under: - "I state that as part of management of the affairs of the Corporate Debtor, the Deponent inter alia is continuing the construction of residential and commercial dwelling units forming part of the real estate projects of the Corporate Debtor. I further state during the corporate insolvency resolution process (hereinafter, "CIR Process"), the IRP continued construction of residential and commercial dwelling units and has issued Offer of Possessions (OOPs) for 7996 units based on occupancy certificates received from the NOIDA Authority, from time to time. That out of these OOPs issued, sub-lease registration of 6,429 has been completed. The process of issuance of OOPs as started by the Deponent after the receipt of such occupancy certificates continues. I further state that for approximately 2,688 allottees to whom OOPs providing for delay rebate was issued prior to 17.12.2019, either the Sub-Lease Dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alia, of the pre-existing state of law as also the objects and reasons for enactment of the Code. While observing that focus of the Code was to ensure revival and continuation of the corporate debtor, where liquidation would be the last resort, this Court pointed out that on its scheme and framework, the Code was a beneficial legislation to put the corporate debtor on its feet, and not a mere recovery legislation for the creditors. This Court said, - "27. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganisation and insolvency resolution of corporate debtors. Unless such reorganisation is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximisation of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insolvency resolution and liquidation for corporate persons. Chapter I of Part II makes provision for its applicability and also defines various expressions used in this Part (Sections 4 and 5). Chapter II of Part II contains the provisions for corporate insolvency resolution process in Sections 6 to 32 whereas Chapter III of this Part II contains the provisions for liquidation process in Sections 33 to 54 Sections 4 to 32 came into force on 01.12.2016 whereas Section 33 to 54 came into force on 15.12.2016. 64.1. A glance at Chapter II of Part II would inform that it contains the blueprint for the process of insolvency resolution in relation to the corporate debtors to whom this Part applies, while specifying the persons who could initiate the process; the manner and impact of such initiation; the roles and rights as also duties of key persons and entities to be involved in the resolution process like the resolution professional, the Committee of Creditors, the authorised representative of financial creditors and the resolution applicant; the matters essential for preparation of the resolution plan; the submission and approval of the resolution plan; and the appeal against approva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etermining Point A concerning the scope of the jurisdiction of the Adjudicating Authority in dealing with the resolution plan approved by the Committee of Creditors. At this juncture, we may only indicate the importance of a few essential role players in the process, as discernible from the relevant provisions of the Code and as exposited by this Court. 66.1. In the scheme of IBC, the script of corporate insolvency resolution process, to a large extent, revolves around the resolution professional. When CIRP gets initiated with admission of the application by the Adjudicating Authority as per Sections 7, 9 or 10, as the case may be, an interim resolution professional is appointed by the Adjudicating Authority in terms of Section 13(1)(c) and in the manner laid down in Section 16. Collating and admitting the claims of all creditors; appointing and convening the meetings of the Committee of Creditors; and running the business of the corporate debtor as a going concern during the intermediate period are the key tasks assigned to the interim resolution professional, as distinctly appears from Sections 15, 17, 18 and 20 of the Code. Further, in the scheme of IBC, the Committee of Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for payment, in full or in part or not at all, by the resolution applicant and be finally negotiated and decided by the Committee of Creditors." 66.2. Further, the role of prospective resolution applicant has also been explained in Essar Steel with reference, inter alia, to UNCITRAL Legislative Guide as also Regulations 37 and 38 of the CIRP Regulations on the contents of a resolution plan, while pointing out the rights of a prospective resolution applicant to receive necessary information as also its duty to prepare the resolution plan providing for necessary measures for insolvency resolution of the corporate debtor with maximisation of the value of its assets. Committee of Creditors: the protagonist of CIRP 67. While in their representative roles, the resolution professional and the resolution applicant are duty bound to ensure that the resolution plan is prepared in conformity with the requirements of the Code and the CIRP Regulations and is properly presented for consideration, the central role in taking the decision as to whether a resolution plan be adopted or not, in the same form as presented to it or in a modified form; and as to whether the attempt for revival of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the essential theme that the 'appropriate disposition of a defaulting firm is a business decision, and only the creditors should make it'. 67.2. In the case of K. Sashidhar (supra), while setting out the relevant extracts from the said Report, this Court exposited on the primacy of the commercial wisdom of the Committee of Creditors in the corporate insolvency resolution process in the following terms: - "52. As aforesaid, upon receipt of a "rejected" resolution plan the adjudicating authority (NCLT) is not expected to do anything more; but is obligated to initiate liquidation process under Section 33(1) of the I&B Code. The legislature has not endowed the adjudicating authority (NCLT) with the jurisdiction or authority to analyse or evaluate the commercial decision of CoC much less to enquire into the justness of the rejection of the resolution plan by the dissenting financial creditors. From the legislative history and the background in which the I&B Code has been enacted, it is noticed that a completely new approach has been adopted for speeding up the recovery of the debt due from the defaulting companies. In the new approach, there is a calm period followed by a swift reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, executive or judiciary) into this question. This has been strictly avoided by the Committee. The appropriate disposition of a defaulting firm is a business decision, and only the creditors should make it." (emphasis in bold supplied; emphasis in italics is in original) 67.3. In Essar Steel (supra), a 3-Judge Bench of this Court surveyed almost all the relevant provisions concerning corporate insolvency resolution process; and, as noticed above, explained the assignments of different role players in this process. In that context, this Court again explained the primacy endowed on the commercial wisdom of the Committee of Creditors and reasons therefor, with a further detailed reference to the aforesaid report of the Bankruptcy Law Reforms Committee of November, 2015. Apart from the passage from the said report that was noticed in K. Sashidhar (reproduced hereinabove), the Court noticed various other passages from this report in Essar Steel; and one part thereof, which further underscores the rationale for only financial creditors handling the process of resolution, could be usefully reproduced as under (part of paragraph 56 at p. 578 of SCC): - "5.3.1. Steps at the start of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the majority vote of the Committee of Creditors, nothing can be done qua the management of the corporate debtor by the resolution professional which impacts major decisions to be made in the interregnum between the taking over of management of the corporate debtor and corporate resolution by the acceptance of a resolution plan by the requisite majority of the Committee of Creditors. Most importantly, under Section 30(4), the Committee of Creditors may approve a resolution plan by a vote of not less than 66% of the voting share of the financial creditors, after considering its feasibility and viability, and various other requirements as may be prescribed by the Regulations. *** *** *** 64. Thus, what is left to the majority decision of the Committee of Creditors is the "feasibility and viability" of a resolution plan, which obviously takes into account all aspects of the plan, including the manner of distribution of funds among the various classes of creditors. As an example, take the case of a resolution plan which does not provide for payment of electricity dues. It is certainly open to the Committee of Creditors to suggest a modification to the prospective resolution ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or its approval, ought to muster not less than 66% votes of the voting share of the financial creditors. 69. The significance of primacy of the Committee of Creditors in the process of corporate insolvency resolution unfolds itself when we examine the contours of the jurisdiction of Adjudicating Authority dealing with a resolution plan after the same has been voted at by the Committee of Creditors. We have formulated the questions relating to such contours as the first point for determination in view of the fact that most of the other questions involved in this batch of matters revolve around the order dated 03.03.2020 as passed by the Adjudicating Authority in approval of the resolution plan of NBCC with certain modifications. The decision on legality and validity of the order passed by the Adjudicating Authority on any particular objection or issue would largely depend on the question as to whether the Adjudicating Authority has acted within its jurisdiction or has overstepped its jurisdiction or has acted illegally or with material irregularity in exercise of its jurisdiction. In fact, contours of the jurisdiction of the Adjudicating Authority are also delineated by this Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the voting share of dissenting lender banks was 26.97%. Bank of Maharashtra, having 6.36% voting share, neither approved nor rejected the plan nor abstained from voting but conveyed that they remained 'open to consider the resolution plan'. Be it noted that at the relevant time, the requirement for approval of the resolution plan, as per Section 30(4) of the Code, was that it ought to be approved by a vote of not less than 75% of voting share of the financial creditors. 73.1.1. The position as obtainable after the aforesaid voting was that the resolution plan fell short of receiving minimum 75% votes of the voting share of the financial creditors. IRP filed an affidavit of the outcome before the Adjudicating Authority (NCLT, Hyderabad) on 03.11.2017. However, the Managing Director of the corporate debtor submitted before the Adjudicating Authority that the majority ought to be counted without taking into account the voting share of the financial creditor who chose not to participate in the voting. It was the submission that with such exclusion, the percentage of voting share in approval of the plan would be 78.63% and, therefore, the plan could be taken as approved by the CoC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he questions as to whether the percentage of voting share of the financial creditors specified in Section 30(4) of IBC was mandatory; as to whether the votes of the financial creditors who had abstained from voting were required to be ignored for the purpose of computing the required percentage of voting share; as to whether the amendments brought into force during the pendency of appeals were applicable to those cases; and as to whether it was open to the Adjudicating Authority/Appellate Authority to reckon any factor other than those specified in Sections 30(2) or 61(3) of IBC, as the case may be, for rejection of the resolution plan? 73.6. This Court analysed the entire scheme of the Code, particularly concerning the resolution plan and its approval by the Committee of Creditors and then by the Adjudicating Authority; and held that the percentage of voting share was not directory and in the light of the provisions contained in the Code and the CIRP Regulations, the approving votes must fulfil the requisite percentage of voting share. The Court also held that the amendment to Section 30(4), prescribing new qualifying standard for approval of resolution plan was neither retrospec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I&B Code. 56. For the same reason, even the jurisdiction of NCLAT being in continuation of the proceedings would be circumscribed in that regard and more particularly on account of Section 32 of the I&B Code, which envisages that any appeal from an order approving the resolution plan shall be in the manner and on the grounds specified in Section 61(3) of the I&B Code....... 57. On a bare reading of the provisions of the I&B Code, it would appear that the remedy of appeal under Section 61(1) is against an "order passed by the adjudicating authority (NCLT)", which we will assume may also pertain to recording of the fact that the proposed resolution plan has been rejected o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied) 74. A few months after the decision in the case of K. Sashidhar, the aforesaid provisions relating to the approval of resolution plan came up for further exposition before a 3-Judge Bench of this Court in the case of Essar Steel (supra). 74.1. On the background aspects, while omitting details, suffice it to notice for the present purpose that in the case of Essar Steel, the NCLT, Ahmedabad admitted the petition filed by a lender bank and after a few rounds of proceedings, the negotiated resolution plan of ArcelorMittal (India) (P) Ltd. was approved by CoC by a majority of 92.24%. After several further proceedings, the Adjudicating Authority, by its order dated 08.03.2019, disposed of the application to approve the resolution plan. However, in the appeal, the NCLAT modified the terms of the resolution plan and proceeded to redistribute the proceeds while, inter alia, holding that financial creditors and operational creditors deserve equal treatment under a resolution plan and while further holding that CoC was not empowered to decide the manner in which distribution was to be made between one or other creditors, as there would be a conflict of interest between financial and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt laid down as under: - "73. There is no doubt whatsoever that the ultimate discretion of what to pay and how much to pay each class or sub-class of creditors is with the Committee of Creditors, but, the decision of such Committee must reflect the fact that it has taken into account maximising the value of the assets of the corporate debtor and the fact that it has adequately balanced the interests of all stakeholders including operational creditors. This being the case, judicial review of the Adjudicating Authority that the resolution plan as approved by the Committee of Creditors has met the requirements referred to in Section 30(2) would include judicial review that is mentioned in Section 30(2)(e), as the provisions of the Code are also provisions of law for the time being in force. Thus, while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors, the limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its asset ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eded to give a direction to the resolution applicant to enhance its fund inflow upfront. 75.2. In the aforesaid backdrop, the matter was considered in appeal filed by the resolution applicant. After having examined the relevant provisions of the Code and the CIRP Regulations as also the enunciations in Essar Steel (supra), this Court observed that there was no provision in the Code or Regulations under which the bid of any resolution applicant has to match the liquidation value; that the object behind such valuation process was to assist the CoC to take a proper decision on the resolution plan; and once the plan was approved by CoC, the Adjudicating Authority was only to ascertain if the resolution plan was meeting the requirements of sub-sections (2) and (4) of Section 30. The Court observed that in the given case, the Appellate Authority had proceeded on equitable perceptions rather than commercial wisdom. Even while observing that release of assets at the value 20% below the liquidation value arrived by valuers appeared inequitable, this Court observed that the adjudicatory process ought to cede ground to the commercial wisdom of the creditors rather than assess the resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity has to be satisfied that the requirement of sub-section (2) of Section 30 of the Code has been complied with. The proviso to Section 31(1) of the Code stipulates the other point on which an adjudicating authority has to be satisfied. That factor is that the resolution plan has provisions for its implementation. The scope of interference by the adjudicating authority in limited judicial review has been laid down in Essar Steel, the relevant passage (para 54) of which we have reproduced in earlier part of this judgment. The case of MSL in their appeal is that they want to run the company and infuse more funds. In such circumstances, we do not think the appellate authority ought to have interfered with the order of the adjudicating authority in directing the successful resolution applicant to enhance their fund inflow upfront." (emphasis in bold supplied) 76. The expositions aforesaid make it clear that the decision as to whether corporate debtor should continue as a going concern or should be liquidated is essentially a business decision; and in the scheme of IBC, this decision has been left to the Committee of Creditors, comprising of the financial creditors. Differently pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts owed to the operational creditors have not been provided for; or the insolvency resolution process costs have not been provided for repayment in priority; or the resolution plan does not comply with any other criteria specified by the Board. 77.3. The material propositions laid down in Essar Steel (supra) on the extent of judicial review are that the Adjudicating Authority would see if CoC has taken into account the fact that the corporate debtor needs to keep going as a going concern during the insolvency resolution process; that it needs to maximise the value of its assets; and that the interests of all stakeholders including operational creditors have been taken care of. And, if the Adjudicating Authority would find on a given set of facts that the requisite parameters have not been kept in view, it may send the resolution plan back to the Committee of Creditors for re-submission after satisfying the parameters. Then, as observed in Maharashtra Seamless Ltd. (supra), there is no scope for the Adjudicating Authority or the Appellate Authority to proceed on any equitable perception or to assess the resolution plan on the basis of quantitative analysis. Thus, the treatment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rameters have not been kept in view, the Adjudicating Authority may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the parameters. The reasons given by the Committee of Creditors are, thus, looked at by the Adjudicating Authority only from this point of view. It is not a jurisdiction to decide as to what ought to be the terms of the resolution plan. That jurisdiction, in the scheme of IBC, is conferred on the Committee of Creditors alone, who has to take such a decision in its commercial wisdom, while keeping in view the applicable provisions and the specified parameters; of course, its decision of approval has to be by the requisite majority of minimum 66% of the voting share. 77.6. In yet another set of submissions, on behalf of the erstwhile director of JIL and JAL, it has been repeatedly asserted that the Committee of Creditors had failed in its statutory duty to ensure maximisation of JIL's assets and protecting the interests of all stakeholders; and it is submitted that the Committee of Creditors failed to visualise that there was no justification for NBCC seeking to acquire JIL on a meagre amount of INR 120 crores despite t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the framework of the parameters aforesaid and the principles laid down by this Court. Point B Simultaneous voting over two resolution plans by CoC 80. While dealing with a plethora of disputes and objections concerning the resolution plan of NBCC and the process of its approval, we deem it appropriate to deal, first of all, with a part of objections that approval of the resolution plan of NBCC by CoC is vitiated because of the fact that two resolution plans, of Suraksha Realty and NBCC, were put to simultaneous voting whereas such simultaneous voting on the resolution plans was not permissible. If this part of objections is accepted, perhaps, nothing more would require consideration. 81. It has been argued on behalf of the objectors that at the time of voting by CoC in the present matter, there was no provision in the Code permitting the voting by CoC at more than one resolution plan at a time and in the very scheme of the Code and the requirements of due consideration, it was necessary that one plan was considered at one point of time. The process of simultaneous voting in the present case has vitiated the decision of CoC. It has also been argued that Regulation 39(3B), p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h amendment of subregulation (3) of Regulation 39 of CIRP Regulations and insertion of subregulations (3A) and (3B) thereto. vide second footnote to sub-regulation (3) of Regulation 39 of CIRP Regulations, ibid Such an amendment could only be visualised as clarificatory in nature; and, in any case, even before amendment, there had not been any prohibition in putting two or more conforming resolution plans to vote simultaneously. 84. It is also noticeable that when the matter was considered in the second round of litigation and this Court issued various necessary directions in the order dated 06.11.2019 in exercise of its plenary powers under Article 142 of the Constitution of India, it was specifically provided that the two applicants viz., Suraksha Realty and NBCC would be invited to submit revised plans for consideration. The minutes of CoC meeting have also been placed before us by IRP and it appears that this very aspect was duly deliberated in the meeting where IDBI Bank proposed for simultaneous voting over the two plans and this suggestion was accepted by almost all CoC members except ICICI Bank Ltd. and Axis Bank Ltd., who were having together the voting share of only abou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f no resolution plan getting approved and situation of liquidation may arise. Majority of home buyers who have written to AR of Home Buyers have indicated NBCC as its preferred choice. Home Buyers are also fully aware that without support of other members of COC, none of the resolution plan will get approved by COC. Para 21(i) of Hon'ble Supreme Court judgment dated 06.11.2019 also directed to "place the revised plan(s) before the CoC, if so required, after negotiations and submit report to the adjudicating authority NCLT within such time." To avoid scenario of liquidation or non-compliance of Hon'ble Supreme Court direction, AR of Home Buyers insisted that both the Resolution Plans should be put to vote and the CoC members should be allowed to vote on both the Resolution Plans and in the event that both the Resolution Plans receive more than 66% votes, then the successful Resolution Applicant will be decided basis (sic) the Resolution Plan that has received higher number of votes." 85. In view of the above, we are unable to find any fault in simultaneous consideration and voting over two resolution plans by CoC for electing one of them; and we would have no hesitation in givi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire free from all Encumbrances on following terms & conditions: a. It shall be on lease for a period of 90 (ninety) years from the date of transfer through such lease deeds as may be mutually agreed between the Parties. *** *** *** c. The sole premium of the transferred land shall be equivalent to the acquisition cost plus a lease rent of Rs. 100.00 (Rupees one hundred) only per hectare per year. The acquisition cost shall be the actual compensation paid to the land owners without any additional charge and shall be payable by the Concessionaire as per applicable rules. The rent shall be payable annually for 90 (Ninety) years from the date of transfer of land. d. The Concessionaire shall be entitled to further sub-lease developed / undeveloped land to sub-lessees / end-users in its sole discretion without any further consent or approval or payment of any charges / fee etc. to TEA or any other relevant authority. e. After sub-lease of part of the land by the Concessionaire, the same can be transferred / assigned without requiring any consent or approval of or payment of any additional charges, transfer fee, premiums etc. to TEA or to any other relevant authority and/or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Concessionaire or the SPV." 87.1. It is not in dispute that under the said Concession Agreement, JIL got the rights: (a) to construct and operate the Expressway and collect toll for a period of 36 years; and (b) to use the land along the Expressway for commercial exploitation for a period of 90 years. 88. The issue pertaining to additional amount of land acquisition compensation cropped up in the wake of a decision of the Full Bench of Allahabad High Court dated 21.10.2011 in the case of Gajraj and Ors. v. State of U.P. and Ors.: 2011 SCC OnLine All 1711, wherein the High Court ruled in favour of payment of additional compensation to the land owners involved therein. The said decision in Gajraj was upheld by this Court in the case of Savitri Devi v. State of U.P. & Ors.: (2015) 7 SCC 21. In sequel, a spate of litigation in Allahabad High Court concerning other parcels of land came up and several other land owners, including whose land stood acquired for the project in question, demanded additional compensation. It is stated by YEIDA that looking to such litigations and agitations, the Government of U.P. proceeded to set up a committee called the 'Chaudhary Committee'; and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that: (i) As mentioned in this Plan, this Resolution Plan assumes that no amount is payable by the Corporate Debtor in relation to the Landowner Compensation Debt in view of the Award. However, if the said position changes on account of the Award being overruled then in relation to the Landowner Compensation Debt, the amounts payable to the landowners shall be collected directly by YEIDA in the following manner for the following parcels of lands (in relation to which such debt accrues), from the ultimate end-users: (i) Land under development (real estate projects) - the compensation in this regard shall be collected by YEIDA from the Home Buyers; (ii) Land already subleased to other entities by the Corporate Debtor - the compensation shall be collected from the respective sub-lessees to whom the lands have been subleased by the Corporate Debtor either directly or indirectly; (iii) Unutilized land parcels - the compensation shall be collected from the end users in whose favour such land shall be transferred/subleased by the Corporate Debtor; and (iv) Yamuna Expressway - Yamuna Expressway is a project of public utility and the ultimate owner of the project land is YEID ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately (on withdrawal of such appeal) without any additional payment for the same. However, the Resolution Applicant shall make a payment of INR 1 Cr in consideration of full and final settlement of YEIDA's claim if any arising out of such appeal, considering YEIDA's claim as Operational Debt in terms of IBC and to ensure equitable treatment to all the Operational Creditors." 91.2. Further, in Clause 14 of Schedule 3 of the plan, the resolution applicant sought extinguishment of liability towards capital cost pertaining to Noida-Greater Noida Expressway in the following terms: - "14. The liability arising out of the Concession Agreement, to repay the capital cost pertaining to Noida-Greater Noida Expressway (treated as interest free loan from YEIDA to the Corporate Debtor) shall stand extinguished, on account of failure of YEIDA to allow the Corporate Debtor to collect and retain toll/fee from the users of the Noida-Greater Noida Expressway during the term of the Concession Agreement, as agreed under Clause 3.7 of the Concession Agreement." 91.3. Yet further, in Clause 27 of Schedule 3, the resolution applicant expected an extension of the period under the CA by 10 years. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end-users. However, the Adjudicating Authority proceeded to modulate such terms 'to make the plan viable' and provided that the resolution plan be read to mean that YEIDA shall have a right to collect acquisition cost through the SPVs concerned. With regard to the issue of additional compensation concerning the land of Expressway, the Adjudicating Authority considered it appropriate to read the resolution plan in the way that it is left open to both the parties to have proper recourse over this issue before a competent forum when the time would come for payment of additional compensation. As regards transfer of concessionaire's rights and obligations to SPVs, the Adjudicating Authority was of the view that, when JIL as concessionaire was, for the first time, proposing to transfer its rights and obligations to SPVs, the documents involving the concessionaire JIL, YEIDA and the SPV concerned were required to be executed. The NCLT also observed that the CA was based on the statute created by the State Government and, therefore, violation of its terms and conditions would be a violation of the law in force and would not be permissible in terms of Section 30(2) of the Code. 94.1. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions as may be specified in the regulations, the Authority may, by Agreement, authorize any person to provide or maintain or continue to provide or maintain any infrastructure or amenities under this Act and to collect taxes or fees, as the case may be, levied therefore.", it is contended that YEIDA may by an agreement authorise any person to provide or maintain, or continue to provide or maintain, any infrastructure or amenities and therefore, once an agreement was reached between JIL and YEIDA, their relationship would be governed by that contract (Concession Agreement). It is submitted that while enacting Section 6-A of the U.P. Act of 1976, the intent of the legislature has been to carve out a contractual relationship distinct from the statute and this goes against the whole construct of 'statutory contract' which YEIDA is trying to project. The decisions of this Court in the cases of India Thermal Power Ltd. v. State of M.P. and Ors.: (2000) 3 SCC 379 and Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Ors.: (2000) 6 SCC 293 have been referred to submit that merely for YEIDA being a statutory body, the contract in question does not partake the character of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.5. As regards decision of this Court in the case of Municipal Corporation of Greater Mumbai (MCGM) v. Abhilash Lal and Ors.: (2019) SCC OnLine SC 1479, which is relied upon by YEIDA, it is submitted that the said decision is not applicable to the facts of the present case because therein, MCGM had not entered into a binding lease agreement containing the terms similar to the CA applicable to the parties herein. Moreover, in the said decision, the statute, i.e., Municipal Corporation of Greater Mumbai Act, 1888, itself provided that the only way MCGM's properties could be dealt with was through lease or by way of creation of any other interest with the prior permission of MCGM, but there is no similar provision in the U.P. Act of 1976. 96. On behalf of the IRP, it has been submitted that granting or refusing the reliefs sought for under Schedule 3 of the resolution plan is a matter within the discretion of the Adjudicating Authority and even if the same have not been granted, they do not form a part of the commercial terms of the plan; and the referred clauses of 'reliefs and concessions' are not hit by Section 30(2)(e) of the Code. 97. The associations of homebuyers as also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he other part of impugned order dated 03.03.2020, it is submitted that there being no privity of contract between YEIDA and the end-users, the amount towards additional compensation could only be collected from the SPVs and not directly from the endusers. According to YEIDA, the Adjudicating Authority has rightly modified the mechanism in the resolution plan for collection of additional compensation in the manner that instead of collecting the amount directly from the end-users, YEIDA would now be collecting it through the SPVs concerned. This has, according to YEIDA, no impact on the commercial aspects of the resolution plan. 99.3. It is also submitted that the contract in question, that is, the Concession Agreement, is a statutory contract entered into by YEIDA for public purpose and it cannot be altered or modified through a resolution plan as an ordinary commercial contract. It is submitted that the CA grants and governs the rights of corporate debtor JIL over the land of YEIDA; that such rights are limited and distinct from ownership rights; and that the resolution applicant cannot unilaterally alter the CA and improve upon the rights granted thereunder to enhance the assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution applicant that Land Bank SPV is not governed by the CA or that there is no restriction on the corporate debtor's ability to sub-lease, it is submitted that the rights for development of the land along the proposed Expressway were to be provided at five or more locations with one location in Noida or Greater Noida in terms of Clause 3.3 of the CA. Therefore, the suggestion that this land may not be governed by CA is not correct. As regards the right to sub-lease, it is submitted on behalf of YEIDA that as per the terms of plan, it is not a mere sub-lease in favour of Land Bank SPV but the chunk of land for development is sought to be transferred to the Land Bank SPV by way of business transfer; and in any case, in terms of the referred clauses of CA, execution of tripartite agreement is a condition indispensable. 99.8. It has also been submitted that YEIDA has consistently taken the stand that it would be ready to do everything within its power to ensure that the plan is a success but even after long length of time, the resolution applicant has not even approached YEIDA for execution of necessary documents. While relying on the aforesaid decision in MCGM, it has been argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Adjudicating Authority; and these aspects having not been appealed against, the clauses in question deserve to be deleted from the resolution plan. 100. The submissions so made on behalf of YEIDA have been supported by the erstwhile director of JIL with reference to the decision in Embassy Property (supra) and with the submissions that YEIDA being a statutory body created under the U.P. Act of 1976, the agreement entered into between YEIDA and the corporate debtor is statutory in nature and this relationship is not just contractual but is statutorily governed. The requirement that YEIDA must collect compensation from the homebuyers or end-users in case it succeeds in the arbitration case, according to the erstwhile director, is in contravention of the law for the time being in force, for it violates the U.P. Act of 1976. It is further submitted that the Adjudicating Authority has rightly ordered execution of tripartite agreement involving the proposed SPVs. In essence, the submission has been that the treatment of YEIDA in the resolution plan is not in conformity with the law and the order passed by the Adjudicating Authority calls for no interference. 101. While dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement can be on such terms as may be agreed by the parties except that the tariff is to be determined in accordance with the provision contained in Section 43-A(2) and notifications issued thereunder. Merely because a contract is entered into in exercise of an enabling power conferred by a statute that by itself cannot render the contract a statutory contract. If entering into a contract containing the prescribed terms and conditions is a must under the statute then that contract becomes a statutory contract. If a contract incorporates certain terms and conditions in it which are statutory then the said contract to that extent is statutory. A contract may contain certain other terms and conditions which may not be of a statutory character and which have been incorporated therein as a result of mutual agreement between the parties. Therefore, the PPAs can be regarded as statutory only to the extent that they contain provisions regarding determination of tariff and other statutory requirements of Section 43-A(2). Opening and maintaining of an escrow account or an escrow agreement are not the statutory requirements and, therefore, merely because PPAs contemplate maintaining e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Governments and other authorities'. The authority concerned in the present case, YEIDA, is the one established by the State Government under the U.P. Act of 1976 and its approval remains sine qua non for validity of the resolution plan in question, particularly qua the terms related with YEIDA. The stipulations/assumptions in the resolution plan, that approval by the Adjudicating Authority shall dispense with all the requirements of seeking consent from YEIDA for any business transfer are too far beyond the entitlement of the resolution applicant. Neither any so-called deemed approval could be foisted upon the governmental authority like YEIDA nor such an assumption stands in conformity with Regulation 37 of the CIRP Regulations. 104. Furthermore, the suggestion that Clause 18.1 of the CA had been a one-time measure and that stands exhausted with creation of JIL as SPV and transfer of original concessionaire's rights to JIL, has its own shortcomings. The concept and purport of Clause 18.1, of course, at the relevant time had been of the obligation on the original concessionaire to execute the documents for creation of SPV and this clause came in operation when JIL was creat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PVs, one for Expressway and another for the remaining land for commercial development, is not altogether prohibited but then, it cannot be suggested by NBCC that such creation of SPVs could be even without necessary documentation involving YEIDA. In this regard, YEIDA seems to be right in its contentions that such documentation is even otherwise required for avoiding any ambiguity about the rights and obligations and also for itself (YEIDA) to properly monitor the functioning of SPVs, each of which would stand in the capacity of concessionaire and would be carrying the rights and obligations under the CA. 104.4. For what has been discussed above, we need not delve into the decision of this Court in MCGM (supra), where the statutory provision itself required prior approval of the local body before dealing with its properties through lease or by creation of any other interest. Though in the present case, there is no such statutory embargo but for that matter, all the terms of the Concession Agreement cannot be forsaken. Any alteration in the essentials of the Concession Agreement would require the consent of YEIDA. 104.5. The Adjudicating Authority (NCLT), while disapproving the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rights and obligations under the CA. 105.2. We find the prescriptions in the resolution plan in regard to the contingent liability of additional compensation to be questionable on more than one count. 106. The question is yet to be finally determined as to whether such a liability towards additional amount of compensation rests with the corporate debtor JIL or with YEIDA, because the arbitral award made in favour of JIL is the subject matter of challenge in the Court. However, the contingency was required to be provided in the plan in case liability would be ultimately fastened on the corporate debtor JIL. It has not been suggested that any such bifurcation of liability, qua the land under Expressway on one hand and other parcels on the other, is a subject matter of the arbitration proceedings. However, going by the terms of the CA, prima facie, we are unable to find any indication therein that the liability for compensation with reference to the land under Expressway is not of the concessionaire. In any case, while making a provision for meeting with this contingent liability of additional amount of compensation, the resolution applicant could not have decided of its own that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an agency of the government like YEIDA to give up or withdraw from a pending litigation. Similarly, extinguishment of existing liability qua YEIDA is not a relief that could be given to the resolution applicant for askance. For the same reason, the resolution applicant cannot seek extension of time period of the Concession Agreement by way of a clause of 'relief' in the resolution plan without the consent of a governmental body like YEIDA. 108. Before concluding on this point for determination where we have accepted the major parts of the objections of YEIDA, we may, in fairness to all the parties concerned, reiterate that despite stating its objections, YEIDA has consistently maintained before the NCLT as also before this Court - vide paragraphs 47.2, 99 and 99.8 (supra) that it does not stand to oppose the resolution plan only for the sake of opposition; rather it would like the plan to succeed but, it has a public duty to ensure that the framework under CA is preserved and else, it would be ready to do everything within its power to ensure that the plan is a success. Thus, it would not be out of place to add a sanguine hope that being the owner of the land in question and publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TOR 1. Part of the Admitted Financial Debts of the Institutional Financial Creditors shall be settled to an extent of INR [Fresh Debt- 2,000] Cr by making upfront Payment of ~ INR [Fresh Debt - (less) 2,000] Cr by the Expressway SPV, to be incorporated by the Corporate Debtor under Step 2 above. No prepayment penalty shall be payable to the Institutional Financial Creditors, in the event of any upfront payment of debt of as provided above. 2. In this regard, it is clarified that upon payment of upfront amount aggregating to INR [Fresh Debt - (less) 2,000] Cr to the Institutional Financial Creditors, their charge over the Yamuna Expressway and toll cash flow shall be automatically released, without any further deed or act by the parties. "STEP 6B: TREATMENT OF INSTITUTIONAL FINANCIAL CREDITORS FOR THE REMAINING AMOUNT After upfront payment is made to the Institutional Financial Creditors as contemplated under Step-6A above, the remaining Admitted Financial Debt due to the Institutional Financial Creditors shall be settled in its entirety in the following manner. Conversion of part of Admitted Financial Debt (due to Institutional Financial Creditors) into equity shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations on 31 December 2017, the requirement for disclosing the Liquidation Value of a corporate debtor undergoing resolution to the resolution applicants has been dispensed with and accordingly, the Liquidation Value for the Corporate Debtor is currently not available with us. However, as per our estimate, the liquidation value owed to the Dissenting Financial Creditors, in terms of Sections 30 and 53 of the IBC read with Regulation 38 of the CIRP Regulations is expected to be nil.; However, in the event the Dissenting Financial Creditors are entitled to some amount in the nature of liquidation value in terms of Sections 30 and Section 53 of the IBC read with Regulation 38 of the CIRP Regulations, then the Dissenting Financial Creditors would be provided the liquidation value owed to them in terms of Section 30(2) and Section 53 of the IBC read with Regulation 38 of the CIRP Regulations in the form of proportionate share in the equity of the Expressway SPV and transfer of certain land parcels belonging to the Corporate Debtor. For avoidance of doubt it is clarified that on account of the transfer of equity and transfer of land parcels in favour of Dissenting Financial Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envisaged only by way of cash payment, money or other valuable thing delivered to discharge the obligation would be construed as "payment", fulfilling the requirement of Section 30(2) of the Code. It was also submitted that when the assenting financial creditors were not being paid in cash, any such payment to the dissenting financial creditors would cause prejudice to the rights of the assenting financial creditors. As noticed, the Adjudicating Authority rejected the stand so taken by IRP and NBCC and observed that all the provisions and specifications of the Board made it clear that payment to dissenting financial creditors means payment of the amount; and it cannot be argued that the payment could also be in a manner other than cash. The Adjudicating Authority also rejected the contention made with reference to the treatment assigned to the assenting financial creditors while observing that a person agreeing might agree for anything but the same may not be acceptable to the person disagreeing. Accordingly, the Adjudicating Authority (NCLT) did not approve the proposal in the resolution plan as regards treatment of the dissenting financial creditors. 112.1. However, after disap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the position, it could not have raised any objection at a later stage. 113.1.2. It is further submitted that the requirements in Section 30(2)(b) of the Code stress upon the 'value' a dissenting financial creditor is entitled to receive but, it has nowhere been provided that the manner of payment has to be in cash; rather the manner of payment has been left to be specified by the Board and the Board has also not specified that such payment has to be in cash only. 113.1.3. Further, according to IRP, if the word "payment" is given a prescriptive meaning, it would result in clause (b) of sub-section (2) of Section 30 prescribing the manner of distribution and that would amount to amending the word "creditor" in sub-section (4) of Section 30. It is submitted that in the scheme of the Code, dissenting financial creditors are bound to accept the manner of distribution in the resolution plan as approved by the majority of 66% or more of the voting share in the CoC and if they are not held so bound, the provisions permitting the CoC to take decisions with requisite majority would be rendered nugatory. 113.2. The resolution applicant NBCC has also made long ranging submissions in chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... language employed under Section 8(2)(b) of the Code includes payment by way of electronic transfer or by cheque. On the other hand, Section 30(2) of the Code is in relation to payment under a resolution plan, and does not in any manner stipulate the mode of payment. 113.2.3. It is also contended that the word 'payment' is required to be interpreted with reference to its context and placement; and to support the submissions on contextual interpretation, reliance is placed on the decisions in Commissioner of Income Tax, Madhya Pradesh & Bhopal v. Shrimati Sodra Devi: AIR 1957 SC 832; Kolkata Metropolitan Development Authority v. Gobinda Chandra Makal and Anr.: (2011) 9 SCC 207; Indian Handicrafts Emporium and Ors. v. Union of India and Ors.: 2003 (7) SCC 589; CIT, Bangalore v. Venkateswara Hatcheries (P) Ltd.: (1999) 3 SCC 632; and Union of India v. Sankalchand Himatlal Sheth and Anr.: (1977) 4 SCC 193. 113.2.4. It has also been submitted that the context in relation to the word "payment" needs to be examined in terms of the object and purpose of resolution of insolvency and not in terms of recovery of debt; and in the light of the fact that for the purpose of insolvency resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apart from above, NBCC has also referred to its affidavit filed during the course of hearing while submitting that the admitted debt of ICICI Bank is INR 304.1 crores which is 1.31% of total financial debt and as per the final statement available, the proportionate liquidation value payable to this bank would be about INR 238.84 crores. Thereafter, particulars of the parcels of land proposed to be offered to ICICI Bank and their estimated value as also the estimated value of equity in Expressway have been stated to suggest that adequate provision is being made for payment of debt of this bank while indicating that the bank would also be entitled to its proportionate share under Step 6A of the resolution plan. 113.3. The assenting financial creditor, IDBI Bank, has also supported the submissions aforesaid. The additional parts of its submissions are that ICICI Bank is using its dissent to obtain an advantage over the assenting financial creditors, by seeking to be paid in cash purely by virtue of dissent. It is also submitted that resolution plan was approved by 97.36% of the voting share of the creditors in CoC in its commercial wisdom after assessing the viability and feasibility ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this bank has the right and entitlement to be paid, and in priority over the assenting financial creditors, the amount against its dues, which shall be not less than the amount payable in accordance with Section 53(1) of the Code, that is, the liquidation value; and this payment could only be made in terms of cash and not by any other mode or method. 114.3. It is contended that Section 53 contemplates the proceeds from the sale of the liquidation assets to be utilised to pay the dissenting financial creditors and there is no such conceivable possibility that the assets of a corporate debtor would be liquidated in any other consideration, apart from cash. The payment, for the purpose of Section 30(2)(b) of the Code, would only be in terms of money or a legal tender; and it is entirely impermissible for a resolution applicant to pay such liquidation value to the dissenting financial creditor in kind, unless the latter accepts such form of payment. Various decisions on the process of interpretation have been referred on behalf of the objector bank including those in Sankalchand Himatlal Sheth (supra) and Rathi Khandsari Udyog and Ors. v. State of Uttar Pradesh and Ors.: (1985) 2 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion but, the treatment provided in the resolution plan for dissenting financial creditors is done in a way that they get punished for their dissent. 114.9. It is further submitted that once the resolution plan is put forth before the Adjudicating Authority for its approval, judicial mind is applied to see as to whether such plan fulfils the mandatory requirements under the Code, which involves firstly, compliance with Section 30(2) of the Code; secondly, whether the plan is fair and equitable and balances the interests of all the stakeholders; and thirdly, whether the plan maximises the value of assets. Such approval of NCLT is never a formality, but a necessity. According to the objector bank, the Adjudicating Authority, while modifying the resolution plan, has made sure that the modifications do not alter the basic structure of the plan and hence, has not violated the principle of judicial review. Therefore, the contention that NCLT has acted beyond its jurisdiction and has overridden the commercial wisdom of CoC is incorrect. 114.10.It is also submitted that just because ICICI Bank has voted against the approval of both the resolution plans, it does not mean that the intentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the legislature's right to experiment when coming to the economic legislation like the Code, while observing as under: - "The Legislature's right to experiment in matters economic 15. In Swiss Ribbons, this Court was at pains to point out, referring, inter alia, to various American decisions in paras 17 to 24, that the legislature must be given free play in the joints when it comes to economic legislation. Apart from the presumption of constitutionality which arises in such cases, the legislative judgement in economic choices must be given a certain degree of deference by the courts. In para 120 of the said judgment, this Court held: (SCC p. 112) "120. The Insolvency Code is a legislation which deals with economic matters and, in the larger sense, deals with the economy of the country as a whole. Earlier experiments, as we have seen, in terms of legislations having failed, "trial" having led to repeated "errors", ultimately led to the enactment of the Code. The experiment contained in the Code, judged by the generality of its provisions and not by so-called crudities and inequities that have been pointed out by the petitioners, passes constitutional muster. To stay exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order or priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India. 2. The Preamble to the Code lays down the objects of the Code to include "the insolvency resolution" in a time bound manner for maximization of value of assets in order to balance the interests of all the stakeholders. Concerns have been raised that in some cases extensive litigation is causing undue delays, which may hamper the value maximization. There is a need to ensure that all creditors are treated fairly, without unduly burdening the Adjudicating Authority whose role is to ensure that the resolution plan complies with the provisions of the Code. Various stakeholders have suggested that if the creditors were treated on an equal footing, when they have different preinsolvency entitlements, it would adversely impact the cost and availability of credit. Further, views have also been obtained so as to bring clarity on the voting pattern of financial creditors represented by the authorized representative. 3. In view of the aforesaid difficulties and in order to fill the critical gaps in the corporate insolvency framework, it has become necessary to amend certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tributed under the resolution plan had been distributed in accordance with the order of priorities in section 53 of the Code, whichever is higher; (ii) the financial creditors who do not vote in favour of the resolution plan shall receive an amount that is not less than the liquidation value of their debt; (iii) the provisions shall apply to the corporate insolvency resolution process of a corporate debtor- (A) where a resolution plan has not been approved or rejected by the Adjudicating Authority; or (B) an appeal is preferred under section 61 or 62 or such appeal is not time barred under any provision of law for the time being in force; or (C) where a legal proceeding has been initiated in any court against the decisions of the Adjudicating Authority in respect of a resolution plan; (f) to amend sub-section (1) of section 31 of the Code to clarify that the resolution plan approved by the Adjudicating Authority shall also be binding on the Central Government, any State Government or any local authority to whom a debt in respect of payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, including tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient financial creditor being a minimum amount that was not earlier payable. As a matter of fact, pre-amendment, 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 creditors. It is only for this purpose that Section 53(1) is to be looked at as it is clear that it is the commercial wisdom of the Committee of Creditors that is free to determine what amounts be paid to different classes and subclasses of creditors in accordance with the provisions of the Code and the Regulations made thereunder. 129. As has been held in this judgment, it is clear that Explanation 1 has only been inse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ikely obligation towards them in the manner that they shall be provided a proportionate share in the equity of Expressway SPV and land parcels but not any payment in terms of money. The dissenting financial creditor, ICICI Bank, is thoroughly dissatisfied with such a prescription whereby its dues shall be satisfied by a mode other than direct payment in cash. On the other hand, the IRP, the resolution applicant and even the assenting financial creditor would assert that such a prescription satisfies all the essential requirements of Section 30(2)(b) and Regulation 38(1)(b). Both these provisions essentially use the expressions "payment"; "the amount to be paid"; "the amount payable"; and "shall be paid". ICICI Bank asserts that these expressions refer only to the payment in monetary terms, whereas the submissions are countered with the assertions that the term "payment" is with reference to discharge of obligation and that could be brought about by any of the methods permissible in law and not necessarily by way of payment in terms of money alone. This takes us to the principles of interpretation and assigning appropriate meaning to the expressions used. 119.1. The principles in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h all appear, and which all collectively create". Again, it must be remembered that though the words used are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing, be it a statute, or contract, or anything else, it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary, but to remember that a statute always has some purpose or object to accomplish, whose sympathetic and imaginative discovery, is the surest guide to its meaning. The literal construction should not obsess the Court, because it has only prima facie preference, the real object of interpretation being to find out the true intent of the law maker and that can be done only by reading the statute as an organic whole, with each part throwing light on the other and bearing in mind the rule in Heydon's case which requires four things to be "discerned and considered" in arriving at the real meaning : (1) what was the law before the Act was passed; (2) what was the mischief or defect for which the law had not provided; (3) what remedy Parliament has appointed; and (4) the reason of the remedy. There is also another rule of int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision taken as a whole and, on the broad sphere, the entire statute with its objects and intents would lead to the true construction of the expression under reference; of course, while also keeping in view the other relevant principles, including the basics that natural and ordinary meaning of a word or expression is not ignored, unless there be any reason therefor. 120. Keeping the principles aforesaid in view, we may embark upon the interpretation required in this case, of the expressions used in the relevant provisions of Section 30(2)(b) of the Code and Regulation 38(1)(b) of the CIRP Regulations. 120.1. The expression "payment" occurs in Section 30(2) of the Code, which lays down certain basics which the resolution professional has to find in the resolution plan before he presents the same to the Committee of Creditors. As per clauses (a) and (b) of sub-section (2) of Section 30, the resolution plan ought to provide for: (a) payment of insolvency resolution process costs; and (b) payment of debts of operational creditors as also dissenting financial creditors. Such payment has to be in the manner specified by the Board and the resolution process costs rank top in prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so . 5. To be profitable; to bring in a return ." On the same page in Black's Law Dictionary (Tenth Edition, page 1309), the expression "payment" is defined in the following terms: - "Payment. (14c) 1. Performance of an obligation by the delivery of money or some other valuable thing accepted in partial or full discharge of the obligation. 2. The money or other valuable thing so delivered in satisfaction of an obligation." 120.4. In the Law Lexicon by P. Ramanatha Aiyar (Fifth Edition, Volume 3 at page 3796), several connotations of the expression "payment" have been mentioned. We may reproduce the relevant part thereof as under: - "Payment is defined to be the act of paying, or that which is paid; discharge of a debt, obligation, or duty; satisfaction of claim; recompense; the fulfilment of a promise or the performance of an agreement; the discharge in money of a sum due. In legal contemplation, payment is the discharge of an obligation by the delivery of money or its equivalent, and is generally made with the assent of both parties to the contract." 120.5. Significantly, the "payment", as envisaged by clause (b) of Section 30(2) as also Regulation 38(1), is of the " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statute is referring only to the sum of money and not anything else. In the frame and purport of the provision and also the scheme of the Code, the expression "payment" is clearly descriptive of the action of discharge of obligation and at the same time, is also prescriptive of the mode of undertaking such an action. And, that action could only be of handing over the quantum of money, or allowing the recovery of such money by enforcement of security interest, as per the entitlement of the dissenting financial creditor. 121.2. We would hasten to observe that in case a dissenting financial creditor is a secured creditor and a valid security interest is created in his favour and is existing, the entitlement of such a dissenting financial creditor to receive the "amount payable" could also be satisfied by allowing him to enforce the security interest, to the extent of the value receivable by him and in the order of priority available to him. Obviously, by enforcing such a security interest, a dissenting financial creditor would receive "payment" to the extent of his entitlement and that would satisfy the requirement of Section 30(2)(b) of the Code-Though it is obvious, but is clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been necessitated for the reason that quantification of the minimum amount payable under clause (b) of Section 30(2) is in the realm of certain guesswork or estimate with reference to the distribution envisaged by Section 53 of the Code. This Explanation cannot and does not provide meaning to the expressions "payment" and "amount to be paid". These and other arguments of similar nature, could only be rejected. 123.1. A submission made on behalf of IRP suggesting estoppel against the dissenting financial creditor for having not raised the issue in the meeting of the Committee of Creditors also remains baseless. This is for the simple reason that no estoppel could operate against the statutory right of the dissenting financial creditor to receive payment in terms of Section 30(2)(b) of the Code. 123.2. The submission that commercial banks are permitted by the Banking Regulations Act, 1949 to swap the debt for land and equity has its own shortcomings, rather shortfalls. The expressions "payment" and "amount to be paid" and "amount payable" as occurring in Section 30(2) and Regulation 38(1) cannot be interpreted only for the purpose of banks as financial creditors; the provisions r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial creditors cannot be accepted. 123.5. The other submissions and counters with reference to the phraseology of Section 8 of the Code do not require much dilation because, the said provision essentially relates to the dues of an operational debtor and the steps envisaged before commencement of insolvency resolution process. Nevertheless, "payment" for the purpose of the said provision is also of money transfer; and not by any other mode. 124. To sum up, in our view, for a proper and meaningful implementation of the approved resolution plan, the payment as envisaged by the second part of clause (b) of sub-section (2) of Section 30 could only be payment in terms of money and the financial creditor who chooses to quit the corporate debtor by not putting his voting share in favour of the approval of the proposed plan of resolution (i.e., by dissenting), cannot be forced to yet remain attached to the corporate debtor by way of provisions in the nature of equities or securities. In the true operation of the provision contained in the second part of sub-clause (ii) of clause (b) of sub-section (2) of Section 30 (read with Section 53), in our view, the expression "payment" only refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy the plan and to the CoC to reconsider and vote upon the same. 128. In other words, the Adjudicating Authority, of its own, could not have made any modification in the resolution plan, particularly on any commercial aspect thereof. The suggestions that in carrying out the requisite modifications by the Adjudicating Authority, the basic structure of the resolution plan is not altered do not merit acceptance, particularly because the terms taken up for modification by the Adjudicating Authority belong to the thick of commercial aspects of the resolution plan; and any alteration thereof goes to the very root of the financial model propounded by the plan. 129. The upshot of the discussion foregoing is that though the Adjudicating Authority has not erred in disapproving the treatment of dissenting financial creditor like ICICI Bank in the resolution plan but, has erred in modifying the terms of the resolution plan and in not sending the matter back to the Committee of Creditors for reconsideration while extending an opportunity to the resolution applicant to make the necessary modifications. 130. For what has been discussed and held hereinabove, we see no reason to enter into the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as they were entitled to make a claim under the Companies Act, 2013. 134. The aforesaid modification of the terms of resolution plan has been challenged by NBCC with the submissions that such directions of the Adjudicating Authority are wholly unjustified and are beyond the mandate of this Court in Essar Steel (supra). In our view, the submissions of NBCC deserve to be accepted. 135. In the scheme of the process for corporate insolvency resolution, it is preliminarily provided in Section 13 of the Code that, after admission of an application for corporate insolvency resolution process, the Adjudicating Authority, apart from declaring moratorium and appointing an interim resolution professional, is also required to cause a public announcement of the initiation of CIRP and 'call for submission of claims under Section 15'. As per Section 15, the material information in the public announcement is to contain, inter alia, 'the last date for submission of claims, as may be specified'. The IRP is enjoined with several duties under Section 18 and as per clause (b) thereof, he is to 'receive and collate all the claims submitted by the creditors to him, pursuant to the public announcement m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment must also be set aside on this count." 135.2. It has not been the case of anyone that in the process in question, any of the requirements of Sections 13, 15 and 18 had not been complied with. It has also not been anybody's case that any claim made by any fixed deposit holder within the stipulated time was not taken into account by IRP. 136. In the given fact situation and in view of the law declared by this Court, we find no jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under this Resolution Plan. Further, the Resolution Applicant also reserves its right to cause the Corporate Debtor to transfer its entire shareholding in Jaypee Healthcare Limited into a trust. Such trust would be settled by the Corporate Debtor, the beneficiary of the trust would be the Resolution Applicant and the trustee would be a professional entity (to be appointed by the Resolution Applicant). The trust property would comprise inter alia of the entire shareholding of the Corporate Debtor in Jaypee Healthcare Limited." 138. The objector YES Bank Limited, as being the financial creditor of JHL, had raised objections as regards such stipulations and proposals while asserting that the assets of its debtor JHL could not have been dealt with in this resolution plan. The Adjudicating Authority, though took up such objections for consideration but observed that the resolution applicant NBCC and YES Bank having agreed for constitution of a committee to deal with the shares and assets of the subsidiary company, this issue was not required to be discussed. 139. The objector YES Bank has taken exception to the aforesaid part of the order impugned with the submissions that no s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of all the interested parties including the interests of the Resolution Applicant and in spirit of reconciliatory approach is still willing to work with the Resolution Applicant in finding a working solution so that JHL assets can be monetized in a timely manner. Provided, the Respondent No. 2 / Resolution Applicant is willing to accept the proposals and the safeguards as requested by the Appellant. For brevity's sake, the Appellant's proposal for a workable mechanism is set out in the Written Submissions filed before the Ld. Adjudicating Authority, which is reiterated below: (i) The lenders of JHL led by YBL will take all necessary preparatory measures required for finding a viable buyer to take over the JHL units in a completely transparent manner. (ii) To the above cause, JHL lenders shall be permitted to prepare an information memorandum, seek bids from prospective buyers, appoint independent, impartial and reputed investment bankers to run the process of JHL monetisation. (iii) This is proposed to be done through fullest co-operation from RP of JIL as well as Board and Management of JHL as information and engagement will be critical to run an efficient and ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... divest the entire shareholding of JHL to a third party and/or a trust who would have the requisite expertise to deal with the requirements of healthcare business. It is also submitted, with reference to Section 18(f)(v) of the Code, that the assets of the corporate debtor include securities and shares held in any subsidiary; and shares of a subsidiary company are held as the assets of the parent company in its books, as held by this Court in the case of Vodafone (supra). 140.1. Apart from the above, NBCC has referred to the proceedings before the Adjudicating Authority before passing of the order dated 03.03.2020 and it is pointed out that the Adjudicating Authority, in its order dated 04.02.2020 observed that a settlement may be reached between NBCC and YES Bank and pursuant thereto, YES Bank and NBCC held a meeting on 06.02.2020 to discuss the mechanism for sale of shares of JHL and thereafter, on 07.02.2020, a proposal for sale of shares of JHL was given by YES Bank to which NBCC, in its email dated 14.02.2020 stated that "NBCC is agreeable for constitution of a committee which will take forward the disinvestment process of JHL after approval of the resolution plan as submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll continue to be legally vested in the Corporate Debtor without any liability/obligation to the counter-party." 144. The NCLT has observed that when an agreement is invalid and consideration has not been paid, no separate stipulation is required to be made that such agreement could be cancelled. However, at the same time, NCLT has also observed that even though such a clause has been mentioned in the resolution plan, that did not mean that the agreement holders have lost their right to seek remedy before the competent forum. 145. The agreement holders, while questioning this part of the resolution plan in their appeal, have given the details of five term sheets/agreements with the corporate debtor between 01.05.2017 to 08.08.2017 i.e., before the date of initiation of CIRP (09.08.2017). It is submitted that those term sheets were rectified by CoC in its meetings dated 10.11.2017 and 28.11.2017 and upon assurances of IRP for external development and providing of other services, the appellants had made further part payment, in addition to the amounts already paid. It is further submitted that the resolution plan is contrary to Section 30(2)(e) of IBC as the term sheets/agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he propositions advanced by agreement holders, the observations made by the Adjudicating Authority, in addendum to Clause 21 of 'reliefs and concessions' in the resolution plan but, without encroaching upon the commercial wisdom of CoC, only work towards viability of the plan while extending a fair treatment to the agreement holders, by keeping their right to seek remedy in a competent forum intact. The resolution applicant, NBCC, also does not appear to be having any qualms about it. 148. Thus, in the overall scheme of the resolution plan, the stipulation in question cannot be said to be unfair; and the observations of the Adjudicating Authority in paragraphs 132 and 133 of the impugned order dated 03.03.2020 remain just and proper. No further orders are required in this regard. This point stands determined accordingly. Point H Grievance of minority shareholders 149. The other set of objectors is of the non-promoter shareholders of the corporate debtor, who are also referred to as the minority shareholders. Their grievance is that the resolution plan does not deal with their interests and they have not been provided with a fair exit option. It is submitted that such non-prom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g concern, the action of delisting the public shareholding of the corporate debtor totally defeats the objective. It is also submitted that the resolution plan has not been formulated in accordance with the procedure envisaged by the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009- Hereinafter also referred to as 'Delisting Regulations' which require that an exit opportunity ought to be provided for delisting of shares from the stock exchange. 150.3. It is submitted that though the said shareholders were not part of CoC and did not get the opportunity to attend the meetings of CoC, they made all efforts to voice their concerns and even got issued the notice dated 19.02.2020 to IRP and the resolution applicant but the notice failed to evoke any response. According to these objectors, the resolution plan, as approved by the NCLT, is not in accord with Regulation 38(1A) of the CIRP Regulations and is contrary to the intent of IBC inasmuch as it has failed to maximise the value of assets of corporate debtor and to protect the interests of all the stakeholders. It is also contended that the interests of all the stakeholders ought to have been prote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the rival submissions, we are clearly of the view that objections sought to be taken by the minority shareholders must fail. 153. It is noticed from the resolution plan that the Delisting Regulations, as amended on 31.05.2018, have been duly taken note of; and the step for delisting and extinguishment of existing shareholding is provided in Schedule 2 thereof, in the following terms: - "IX. STEP 8: DELISTING AND EXTINGUISHMENT OF EXISTING SHAREHOLDING 1. As an integral part of the Resolution Plan, post implementation of Step 1, the shares of the Corporate Debtor shall be de-listed, in terms of SEBI (Delisting of Equity Shares) Regulations, 2009. ("Delisting Regulations"), as amended by Amendment to Delisting Regulations dated May 31, 2018, which prescribes that the procedure under the Delisting Regulations are not applicable for any delisting pursuant to an approved resolution plan under the Code, if: (a) the resolution plan sets out a specific delisting procedure; or (b) the resolution plan provides an exit option to existing public shareholders at a price which is higher of the liquidation value (as applied in the order of priority of claims prescribed under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hapter III of the Code, there is a very little likelihood of the shareholders getting even dewdrops out of the waterfall of distribution of assets, as delineated in Section 53 of the Code, where the preference shareholders and equity shareholders stand last in the order of priority. In the totality of circumstances, when the promoters' shareholding is extinguished and cancelled in toto without any consideration, even nominal exit price of INR 1 crore for minority shareholders cannot be termed as unfair or inequitable. In any case, a decision in regard to the aforesaid step in the resolution plan had been that of the commercial wisdom of the Committee of Creditors and is not amenable to judicial review. 153.3. Reference to Section 230 of the Companies Act, 2013, which deals with power to compromise or make arrangements with creditors and members is entirely inapt in the context of the present case because no such proceedings for compromise or arrangements are in contemplation. On the contrary, in the present case, the proceedings of CIRP under the Code have reached an advanced stage with approval of resolution plan by the CoC and the Adjudicating Authority. 153.4. Apart from the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -reaching and ground-breaking effects in the present case for the reason that the homebuyers, as a class, acquired a dominant status in the Committee of Creditors, with more than half of the voting share with them. Obviously, no effective decision of the Committee of Creditors could have been taken without the involvement and assent of the homebuyers. As noticed, the resolution plan in question had been approved by CoC of JIL with more than 97% of the voting share in its favour. In this voting, the homebuyers had the voting share of more than 57%. It goes without saying that if the homebuyers were not to vote for this plan, the same would have not seen its approval with minimum 66% of the voting share of financial creditors, as required by the Code. The other plan of Suraksha Realty got less than 3% votes. If both the plans were unable to muster the requisite (not less than 66%) voting share, the only consequence would have been liquidation of JIL, which every stakeholder wanted to avoid. 157. In the process envisaged by the Code, where the CoC may approve a resolution plan by a vote of not less than 66% of voting share, there remains an obvious possibility of some of the financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal (in T.C. No. 243 of 2020) and has also filed an intervention application in the appeal filed by other associations, that the homebuyers have the locus standi to file an appeal even though they belong to a class of creditors represented through an authorised representative, who voted in favour of the resolution plan of NBCC. This association of dissatisfied homebuyers submits that sub-section (3A) of Section 25A of the Code is only intended to iron out the logistical issues and technical difficulties which arise due to the large number of creditors; and the mere fact that more than 51% of the homebuyers voted in favour of the resolution plan cannot take away the statutory right of appeal. 159.1.1. As regards the major part of grievances, it is contended on behalf of this association that the resolution plan in question is patently illegal and is in contravention of the provisions of RERA and its rules. With reference to Section 30(2)(e) of the Code, it has been argued that the resolution plan must be in conformity with other laws in force and merely because IBC has a non-obstante provision over other laws would be no ground to hold that a resolution plan framed under the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding in conformity with the requirements of Regulation 36A(7) of the CIRP Regulations. 159.1.4. Of course, as regards the said amount of INR 750 crores deposited by JAL, this association maintains that the same was to protect the interests of homebuyers of JIL and forms the part of corpus of JIL but, it is also submitted that if there be any ambiguity with respect to the homebuyers of JAL and they are also to be covered under the deposit so made by JAL, then the amount may be used by the corporate debtor and JAL on a pro rata basis so as to secure the interests of the homebuyers of both these companies. It has also been prayed that NBCC be directed to start the construction within 30 days and to complete the entire project within 3 years; that NBCC be barred from withdrawing; and that NBCC be prohibited from charging the homebuyers with any extra amount towards arbitrary increase in the name of 'Super Built-Up Area', which would be illegal without corresponding increase in the carpet area. 159.2. Another society of homebuyers of the projects undertaken by JIL has directly approached this Court against the order dated 03.03.2020 passed by NCLT, and is essentially aggrieved that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evance is that their application was rejected by NCLT on the ground that AR on behalf of the homebuyers had assented to the resolution plan but without dealing with the specific objection raised by the appellants with regard to the proceedings before the CoC and the procedure adopted by it; and they were not even allowed to make all their submissions before NCLT. According to these appellants, NCLT has applied two standards while dealing with objections of two dissenting financial creditors i.e., ICICI Bank on one hand and the appellants on the other, which amounts to unfair discrimination amongst the same class of creditors; and the findings in paragraph 126 of the impugned order are in the teeth of NCLT's findings in paragraphs 100 and 101 of the same order. 159.3.2. It is submitted that in the 16th meeting of CoC, there was no consensus with regard to the resolution plan to be adopted; and on evaluation of the resolution plans, it was found that the plan of Suraksha Realty was better than that of NBCC considering the scores given by the experts. The appellants have submitted that in the resolution plan by Suraksha Realty, provision was made for delay penalty pertaining to previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, the entire voting process of the CoC, as contemplated under Section 21(8) of the Code, is vitiated. There had been no such written instruction to the authorised representative of the homebuyers and he could not have determined what was the majority mark of homebuyers. It is further submitted that even if the said authorised representative could have consented to put both the resolution plans to vote contrary to the mandate of Regulation 39(3), CoC could not have acted contrary to the provisions of IBC as there could be no waiver of the statute. It is submitted that these objections could have been, and had rightly been, raised before the Adjudicating Authority because there is no other forum to raise these concerns; but the Adjudicating Authority has not addressed them at all. 159.3.5. The issue relating to the said land parcel of 758 acres has also been raised by these appellants with the submissions that after the judgment of this Court dated 26.02.2020, the said land ought to have been included in the resolution plan and used in the interest of homebuyers but the Adjudicating Authority has not examined this aspect of the matter either. 159.4. The submissions on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried out, specific directions need to be issued for completion of the project with all amenities and finishing works. 159.4.4. This association has also relied upon decision of this Court in the case of Wg. Cdr. Arifur Rahman Khan & Ors. v. DLF Southern Homes Pvt. Ltd. & Ors.: (2020) SCC OnLine SC 667 and has prayed for a relief of 6% p.a. simple interest which shall be attached to the allottees of the project "Jaypee Greens Aman" on the total amount paid towards the purchase of the flats in addition to the delay period penalty. It is also submitted that the allottees of Tower Nos. 23, 24, 25 & 27 should not be discriminated and must be treated at par with other allottees, who have already received the penalty for delayed period. 159.4.5. This association has also prayed for directions to IRP to release the payments in a time bound manner to keep the project and its activities as a going concern as the work at the project "Jaypee Greens Aman" has come to a standstill for want of requisite payment of bills of contractors. This association has made yet another prayer for directions to the Noida Authority to issue the necessary Occupancy Certificate. 159.5. Apart from the above-m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government of Uttar Pradesh takes over the full project as it is, provided it meets all rights of the homebuyers! It is submitted that this could be a possibility under Article 142 of the Constitution of India. 160. The submissions so made have been duly opposed by the persons/entities standing in favour of the resolution plan as approved by the Adjudicating Authority. For avoiding unnecessary expansion, we deem it appropriate to take note of the submissions made on behalf of IRP and NBCC as also the financial creditor of JIL in this regard. 160.1. It is submitted on behalf of IRP and NBCC that these associations and homebuyers have no locus standi to challenge the approved resolution plan because, in terms of Section 25A(3A) read with Section 21(6A) of the Code, the homebuyers vote in the CoC as a class; even a dissenting individual within the class is bound by the decision of the majority of that class; and as such, this decision operates as a statutory estoppel against the members of the entire class. It is submitted that the manner of voting by homebuyers has been extensively dealt with by this Court in Pioneer Urban (supra) and the Adjudicating Authority has, in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in the event there is any conflict between the approved resolution plan and the provisions of RERA, the approved resolution plan shall remain binding on all stakeholders under Section 31 of the Code and would override the provisions of RERA in accordance with Section 238 of the Code. 160.5. It is also submitted that resolution plan can alter the contracts with financial creditors and the Code gives wide powers to the resolution applicant to modify financial and operational contracts so as to best serve the interests of all the stakeholders. It is submitted that, as per the proposal under the resolution plan, NBCC would construct and deliver the flats to homebuyers but would not be paying outstanding interests to any homebuyer, and such a proposition is permissible under Regulation 37(f) of CIRP Regulations, that permits a resolution plan to reduce any debts due to any creditors; and such an amendment to the contracts having been agreed to by the overwhelming majority of the CoC, remains binding on all the homebuyers. 160.6. As regards liquidation costs, it is submitted that under Regulation 39B of the CIRP Regulations, CoC has been given a discretion to ascertain the liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the IRP may be directed to do certain things like apply for OCs in respect of certain towers or issue OOPs, it is submitted that the IRP has disclosed in an affidavit before the Court that during the CIRP process, he has been managing JIL as a going concern and has continued construction of residential and commercial dwelling units and has issued OOPs for 7996 units based on the OCs received from the Noida Authority; and out of the OOPs issued, sub-lease registration of 6429 has been completed. It is submitted that the claims of a homebuyer vis-à-vis JIL stand settled on execution of the sub-lease deed and, therefore, all those homebuyers whose sub-lease deeds have not been executed shall be bound by the resolution plan approved by the CoC of JIL. 160.8. Again, as regards IFMD, Step 9 in Schedule 2 has been referred and it is submitted that the above provision is only in relation to the monies paid by the homebuyers to JAL (either directly or indirectly, including payment through JIL) as the resolution applicant does not and will not have any control over JAL. 160.9. Apart from the above, it has also been submitted on behalf of IRP that Regulation 36A(7) applies only t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial creditors' do not stand in conformity with the scheme of the Code and the manner of voting on a plan of resolution by the Committee of Creditors. 164. As noticed, for the purpose of approval of a resolution plan in CIRP, what is required is its approval by a vote of not less than 66% of the voting share of financial creditors; and what is counted for the requisite percentage (66) is the voting share of the financial creditors and not the individual votes of financial creditors. The expression 'voting share' has been precisely defined in clause (28) of Section 5 to mean the voting rights of a single financial creditor in the Committee of Creditors, which is based on the proportion of the financial debt owed to such a financial creditor vis-à-vis the financial debt owed by the corporate debtor. In the scheme of the Code with Explanation to Section 5(8)(f), the debt owed by the corporate debtor towards allottees of the real estate project is considered to be a financial debt but for that matter, every individual allottee does not become an independent financial creditor of the corporate debtor, if the number of allottees are 10 or more, in terms of the meaning assigned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (3A) by Act 26 of 2019. This Court explained the connotation of the said amendment and its logic, while rejecting the challenge to Section 21(6A) and 25A of the Code, in the following: - "63. Given the fact that allottees may not be a homogeneous group, yet there are only two ways in which they can vote on the Committee of Creditors-either to approve or to disapprove of a proposed resolution plan. Sub-section (3-A) goes a long way to ironing out any creases that may have been felt in the working of Section 25A in that the authorised representative now casts his vote on behalf of all financial creditors that he represents. If a decision taken by a vote of more than 50% of the voting share of the financial creditors that he represents is that a particular plan be either accepted or rejected, it is clear that the minority of those who vote, and all others, will now be bound by this decision. As has been stated by us in Swiss Ribbons, the legislature must be given free play in the joints to experiment. Minor hiccups that may arise in implementation can always be sorted out later. Thus, any challenge to the machinery provisions contained in Sections 21(6- A) and 25A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lan in accordance with the decision taken by a vote of more than 50% of the voting share of the homebuyers; and this 50% is counted with reference to the voting share of such homebuyers who choose to cast their vote for arriving at the particular decision. Once this process is carried out and the authorised representative has been handed down a particular decision by the requisite majority of voting share, he shall vote accordingly and his vote shall bind all the homebuyers, being of the single class he represents. 165. In the present case, on one hand, it has consistently been submitted by the stakeholders, particularly the homebuyers, that liquidation of JIL should be eschewed, but on the other hand, some of the associations and homebuyers have attempted to find faults with the resolution plan to which their majority, who voted, took the decision for approval. There is no scope for any homebuyer suggesting himself to be a dissenting financial creditor merely because he was not with majority within the class. His dissatisfaction does not partake the legal character of a dissenting financial creditor. 165.1. A rather overambitious attempt has been made by the homebuyers who have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was no cent percent approval of the resolution plan, or that there was no consensus amongst homebuyers, or that the plan of Suraksha Realty was considered better, are required to be rejected. It is not the case that the AR of homebuyers has not voted in accordance with the decision taken by a vote of more than 50% of the voting share of homebuyers who did cast their vote. In the given set of facts, we have no hesitation in thoroughly disapproving the unnecessary imputations made by one set of homebuyers against the AR that he made any incorrect statement before the CoC. That being the position, and the authorised representative having voted in accordance with the instructions given to him from the class of financial creditors i.e., homebuyers, every individual falling in this class remains bound by his vote and any association or homebuyer of JIL cannot be acceded the locus to stand differently and to project its/his own viewpoint or grievance by way of objections or by way of appeal. All such objections and appeals are required to be rejected on this ground alone. 167. The suggestion about the so-called statutory right of appeal has only been noted to be rejected. The homebuye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... homebuyer or association cannot maintain any challenge to the resolution plan nor could be treated as carrying any legal grievance. 171. Once we have held that these dissatisfied homebuyers and associations are not entitled to put up any challenge to the resolution plan contrary to the decision of the requisite majority of their class, all their objections are required to be rejected outright. Yet, in the interest of justice, we have examined these objections to find if there be any aspect worth consideration within the periphery of Section 30(2) of the Code. We find none. 171.1. The major part of the objections of these dissatisfied homebuyers relate to the purported rights under RERA. We are afraid, even such propositions do not stand in conformity with law. The interplay of RERA and IBC also came up for fuller exposition in the case of Pioneer Urban (supra) and this Court rejected the contentions urged on behalf of the petitioners that RERA being a special enactment dealing with real estate development projects must be given precedence over the Code. In Pioneer Urban, this Court noticed Section 238 of the Code and held as under: - "25. It is significant to note that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anagement in the saddle, subject to the provisions of the Code, so that the corporate debtor may be pulled out of the woods and may continue as a going concern, thus benefitting all stakeholders involved. It is only as a last resort that winding up of the corporate debtor is resorted to, so that its assets may be liquidated and paid out in the manner provided by Section 53 of the Code. On the other hand, RERA protects the interests of the individual investor in real estate projects by requiring the promoter to strictly adhere to its provisions. The object of RERA is to see that real estate projects come to fruition within the stated period and to see that allottees of such projects are not left in the lurch and are finally able to realise their dream of a home, or be paid compensation if such dream is shattered, or at least get back monies that they had advanced towards the project with interest. At the same time, recalcitrant allottees are not to be tolerated, as they must also perform their part of the bargain, namely, to pay instalments as and when they become due and payable. Given the different spheres within which these two enactments operate, different parallel remedies are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertain liquidation costs at the time of approval of the resolution plan or deciding to liquidate the company. This aspect, essentially lying within the arena of commerce, is also required to be left to the commercial wisdom of the Committee of Creditors. In any case, this aspect cannot be said to have a bearing on the decision as regards feasibility and viability of the resolution plan of NBCC and is required to be rejected. Similarly, the objections with reference to Regulation 36A(7) are also required to be rejected because there had not been any condition imposed by NBCC in expression of interest. As regards the conditions in the resolution plan, particularly Clauses 1 and 2 of Schedule 3 thereof, as already indicated, the matter relating to the said amount of INR 750 crores deposited by JAL pursuant to the directions of this Court in Chitra Sharma (supra) is being considered separately; and the stipulation in Clause 2 of Schedule 3 is even otherwise redundant in view of insertion of Section 32A to the Code, as discussed by the Adjudicating Authority, which need not be repeated. Suffice it to observe for the present purpose that the process of approval of the resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate debtor, no housing project could be segregated merely for the reason that the same has been completed or is nearing completion. Point J INR 750 crores and accounting between JAL and JIL 176. We now need to enter into another area of serious dispute in these matters, which relates to the claim over the amount of INR 750 crores (which was deposited by JAL pursuant to the directions of this Court in the case of Chitra Sharma) and the interest accrued thereupon. On one hand, JAL and the persons/entities related with it, including its homebuyers and institutional financial creditor, assert that this money is the property of JAL and ought to come back to JAL but, on the other hand, the resolution applicant NBCC as also the persons/entities related with the corporate debtor JIL, including its homebuyers and the institutional financial creditor, assert that this money is a part of the assets of JIL and the Adjudicating Authority has rightly held so. In a third angle, an association of homebuyers of JAL submits that a part of this amount be designated to complete the construction work in relation to their project. Yet another angle is projected by some of the dissatisfied homebu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the books of accounts of the Corporate Debtor as equity infusion by the Existing Promoters and the corresponding equity of the Existing Promoters shall subsequently be extinguished in a manner similar to that adopted for extinguishment of other equity holding of the Existing Promoters under this Resolution Plan including by way of Capital Reduction or selective Capital Reduction. In the event, the said amount of INR 750 Cr along with the interest accrued is not made available to the Resolution Applicant/Corporate Debtor then the Resolution Applicant has the right to withdraw from this process without any liability of any nature on the Resolution Applicant." 177.2. The resolution plan was approved by the Committee of Creditors; meaning thereby that the aforesaid clause was accepted by the Committee of Creditors. However, the claim towards this amount of INR 750 crores with accrued interest became a bone of contention when the Adjudicating Authority (NCLT) took up the process of approval of the resolution plan, particularly for JAL staking its claim over this amount as being the rightful owner thereof. In this regard, the Adjudicating Authority, after taking note of the orders pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the homebuyers of both JIL and JAL; and this makes the position clear that the said amount was meant for the homebuyers of JAL too. Hence, the Adjudicating Authority (NCLT) proceeded on an erroneous premise that the amount was only for the refund of JIL's homebuyers, thereby seriously prejudicing the homebuyers of JAL. 178.1.3. It is submitted that JAL is committed to make the pending homes for its own homebuyers for which it requires funds; and utilisation of the deposit made by JAL towards the insolvency resolution of JIL would result in a 'Domino Effect' and would expose JAL to the risk of insolvency and, on the other hand, would result in unjust enrichment of the resolution applicant (NBCC). 178.1.4. In another limb of arguments, it is submitted that JAL is conscious of its liability towards JIL, which was INR 195 crores as on 31.03.2020; and since JAL is not in a position to make this payment unless the amount of INR 750 crores is refunded to it, in all fairness, JAL offers that this admitted liability towards JIL could be discharged by appropriating from the said amount of INR 750 crores and the balance be refunded to JAL. It is submitted that the said payable amount m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minate the current construction contracts with Jaiprakash Associates Limited, ("JAL"), which are on cost plus basis and enter into fresh construction contracts with the vendors as may be selected by the Resolution Applicant in accordance with its business policies and such contracts shall be entered into on arms' length basis as per the market standard. Provided that JAL shall not be entitled to terminate such construction contracts for a period of 12 months from the Approval Date." (Emphasis Supplied) 30. The above clearly shows that JAL is at the mercy of NBCC wherein NBCC is free to terminate the contracts for construction unilaterally, whereas JAL cannot. Therefore, it is submitted that the aforementioned balance of Rs. 195 Crores (which was to be appropriated towards the construction of JIL's Projects) can only be adjusted/ set off from the sum of Rs. 750 Crores if NBCC makes a formal submission to the effect that it would be terminating the construction agreements." (emphasis is in original) 178.1.5. It has, therefore, been prayed that the said sum of INR 750 crores along with accrued interest be ordered to be refunded to JAL or in the alternative, the refund may be o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JAL for the benefit of homebuyers of JAL and JIL and it was stated that 92% of the homebuyers wanted to obtain possession of the flat, which is possible only after necessary construction takes place. It is further submitted that the money of the contributors of JAL ought to be first utilised for the construction of the flats of "Knights Court Project" and not towards the resolution plan of JIL or for returning to JAL. This association has stated its own grievance that in the simultaneously held proceedings under RERA, JAL has demanded from its members another sum of INR 98 crores and it is submitted that the liability for completion and development of flats of the aforesaid project was of JAL but there was an unexplained delay of 5-7 years on the part of JAL; and therefore, it was onerous that JAL was demanding such an amount from its members. 178.3.1. It has been submitted on behalf of this association of homebuyers of JAL that only an amount of INR 160 crores is required to finish the aforesaid project and it has been prayed that the same be made available from the said INR 750 crores deposited by JAL, for completing the houses of the members of this association. 178.4. The in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , included this deposit of INR 750 crores by JAL to be treated in the CIRP of JIL and utilisation of this amount has been a condition precedent to the implementation of the resolution plan. 179.1.1. NBCC has elaborated on the submissions that the stipulation in its resolution plan as regards this sum of INR 750 crores was essentially based on the orders of this Court in the case of Chitra Sharma; and on the fact that JAL was directed to deposit this money in the proceedings which were filed in relation to CIRP of JIL. It is submitted with reference to various orders passed in the case of Chitra Sharma that this money was clearly meant for the benefit of homebuyers and though this Court initially discussed the proposition of pro rata disbursement among the refund seekers but no such disbursement was ordered after the Court noticed that an overwhelming majority of homebuyers was desirous of seeking possession of flats and disbursement to refund seekers was going to cause prejudice to others. It is submitted that intention of the Court, that the aforesaid amount shall inure to the benefit of homebuyers, is also apparent from the fact that even after amendment of the Code with effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of accounting would not, as such, require adjudication herein but have some bearing on the issues raised before us and hence, a part of the written submissions on behalf of NBCC in this regard are reproduced as follows: - "2.JAL has claimed by way of an additional affidavit filed in the JAL Appeal claimed that as on 31 March 2020, the amount owed by JAL to JIL has reduced to INR 218 Crores. It needs to be highlighted that under the Resolution Plan, NBCC has reserved its right to terminate all existing contractual arrangements with JAL. 3. It is submitted that as per the records of JIL provided by the IRP and seen by NBCC during its presence in the IMC, it has been observed that: The Home Buyer of JIL are required to pay amounts in the nature of Interest Free Maintenance Deposit ("IFMD") towards the flat units purchased by them, and after the formation of recognized Residents Welfare Associations (RWAs) this IFMD is required to be transferred to RWA as per provisions of the UP Apartments Act. Since JAL is the designated maintenance agency for such flat units as per the existing contractual arrangement between JIL, JAL and the Home Buyers, this payment of IFMD was to be p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts of JAL on the ground that the same were preferential transactions. However, apart from the said 758 acres of land, mortgage of 100 acres of land of JIL to secure JAL's debts could not be set aside as the same was beyond the look back period. Thus, at present a mortgage of 100 acres of land of JIL still exists to secure the debts of JAL. Hence, an amount equivalent to the market value of the 100 acre mortgaged land (mortgaged against 1500 crore loan) could be payable by JAL to JIL, subject to JIL exercising the remedies available to it under the law in this regard. The equivalent value of the said land as per the valuation taken for the purpose of the Resolution Plan (land proposed to be transferred through land SPV) is INR 328 crores. vii. Hence it is submitted that for effective implementation of the Resolution Plan and to ensure that the strict timelines prescribed therein are met, JAL shall pay to JIL immediately upon the disposal of these appeals and under the aegis of this Hon'ble Court a total Amount of Rs. 1084 Crores (756 crores + 328 Cr). viii. The same shall be utilised for the construction in terms of the NBCC Resolution Plan." 179.1.7. Apart from the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court in Chitra Sharma to JAL for making the said deposit was primarily to safeguard the interests of the homebuyers and rehabilitation/restitution of JIL; that it was a conscious decision of this Court keeping the interests of the homebuyers in mind; that if the intention of this Court was to revert this deposit to JAL, an express direction would have been made in that behalf but, despite multiple pleas of JAL, this Court did not do so; that the application of JAL seeking recall of the directions for depositing INR 2,000 crores was dismissed by the order dated 25.10.2017 and it is against the principles of res judicata for JAL to seek the same relief in the present proceedings; that the IRP was conscious of the intention of this Court regarding the fate of the deposit made by JAL and that is why included this amount in the information memorandum with a caveat that it is subject to the order of the NCLT. It is further submitted that any direction for refund of this money to JAL would cause shortage of readily available funds to start the construction, which may jeopardise the fate of the entire project. 179.4. Even those associations of homebuyers of JIL, who have attempte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, after noticing several facets of the matters, including the fact that JAL, the holding company, was not a party to the insolvency proceedings concerning JIL, this Court issued a slew of directions, including that for deposit of INR 2,000 crores by JAL. 181.1. JAL made an avid effort to wriggle out of the rigour of the direction for deposit of INR 2,000 crores while seeking recall of the order passed by this Court or for a modification that would enable it to transfer the rights under the Concession Agreement in respect of the Yamuna Expressway. This attempt on the part of JAL failed after this Court noticed the submissions in opposition that the rights under the Concession Agreement belonged to JIL. The directions of this Court, for deposit as made from time to time in the course of proceedings in Chitra Sharma, resulted in JAL depositing INR 750 crores in instalments. 181.2. The fact of the matter remains, and unfolds from various interim orders passed in the case of Chitra Sharma, that basic concern of the Court was regarding the claim of the homebuyers of JAL and JIL taken as a whole; and it was not stated at any stage by this Court that JAL was to part with this money e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l on behalf of JAL would cause serious prejudice to the discipline of IBC; and this Court particularly observed that clauses (c) and (g) of Section 29A operated as a bar to the promoters of JAL/JIL participating in the resolution process. This apart, after taking note of various grounds urged on behalf of the homebuyers in opposition to the proposal, this Court was convinced that JAL/JIL were lacking in financial capacity and resources to complete the unfinished projects. The reasons that were stated on behalf of the homebuyers in opposition to the proposal of JAL were aplenty where it was, inter alia, alleged that there had been questionable transactions involving mortgage of around 758 acres of JIL's land worth INR 5,000 crores in favour of the lenders of JAL without any consideration and the same were set aside by NCLT- The said order of NCLT was ultimately approved by this Court in the judgment dated 26.02.2020 in the case of Anuj Jain; that the claim by JAL of delivering the flats was also a fractured one because the flats were delivered incomplete and OOP was being made without OC; that about 22,000 homebuyers were suffering due to delays of more than four years in completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 06.06.2018 and that was a major reason that this Court considered it appropriate, while deciding Chitra Sharma on 09.08.2018, to revive the resolution process but while making it clear that it would follow the discipline of IBC. However, this Court did not order that the said sum of INR 750 crores shall stand forfeited to JIL but only transferred the same together with accrued interest to NCLT, so as to abide by the directions of NCLT. 182. Taking all the factors and the orders of this Court into account cumulatively, it is difficult to find if the sum in question was ever ordered by this Court to be deposited by JAL in discharge of its obligations towards JIL or towards homebuyers of JIL alone; and equally difficult it is to accept the submissions made by the resolution applicant and other persons standing with JIL that this corpus of INR 750 crores together with accrued interest has become an asset of JIL. 183. In an overall analysis, it appears that at the relevant time of consideration of the matter in Chitra Sharma, the grievances that were projected before this Court were not confined to the homebuyers of JIL alone but they related to the homebuyers of JAL as well; and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JIL. Even such a tentative proposition did not reach its finality in Chitra Sharma; and after taking note of the other factors and interests of various other stakeholders, the money was transferred to NCLT. In a comprehensive view of the matter, the inference drawn by NCLT in its impugned order dated 03.03.2020, that this money is an asset of the corporate debtor JIL remains unsustainable. 184. Before switching over to the other leg of discussion in regard to this sum of INR 750 crores, it may also be observed that the contentions urged on behalf of the homebuyers of JIL, that this Court having rejected the application of JAL for recalling the directions for depositing the amount of INR 2,000 crores, the claim for refund of deposited amount by JAL is against the principles of res judicata, is also baseless. As noticed, during the course of consideration of the matter in Chitra Sharma (supra), this Court not only declined the prayer for recall of the directions for deposit but, even reiterated such directions on more than one occasion. However, all such orders and directions were interim in nature and from none of those interim orders or from the final judgment in Chitra Sharma, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 750 crores was readily available to the resolution applicant. The submissions in this regard as made on behalf of NBCC are required to be rejected. 186. We may observe that the decisions cited by the parties do not require much discussion. The principles in the cited decisions including those in the case of Embassy Property (supra) that the assets belonging to a third party cannot be utilised towards resolution of a corporate debtor remain fundamental and beyond cavil. Equally, the reference to the maxim actus curiae neminem gravabit, and to the decision in ONGC (supra) has been rather unnecessary because the said principle is essentially employed for the purpose of restitution and putting a party in the position where he would have been but for intervention or lapse of the Court. This principle has been succinctly explained by this Court in the case of South Eastern Coalfields Ltd. v. State of M.P. & Ors.: (2003) 8 SCC 648 in the following words: - "28. That no one shall suffer by an act of the court is not a rule confined to an erroneous act of the court; the "act of the court" embraces within its sweep all such acts as to which the court may form an opinion in any legal proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been of direct refund of this money to JAL but the present matter carries with it several entangled features relating to the amount otherwise payable by JAL to JIL; and these features cannot be ignored altogether. 189.1. As noticed, even when JAL and JIL are two separate corporate entities, JIL is an alter ego of JAL, for having been set up as an SPV and having been substituted as concessionaire in the Concession Agreement aforesaid. The agreements with homebuyers had also been of such a nature where JAL and JIL both were signatories thereto. Additionally, JAL had been extended construction contracts by JIL and, as per the submissions made before us [vide paragraph 178.1.4 (supra)], JAL had been carrying out the construction work and taking steps to reduce the liability towards JIL that stood at a sum of INR 716 crores as on 31.03.2018 and was purportedly reduced to INR 195 crores as on 31.03.2020. Various homebuyers have allegedly made payments towards IFMD to JAL. Moreover, JAL has submitted that balance of INR 195 crores, which was to be appropriated towards the construction of JIL's project, could be adjusted from the said sum of INR 750 crores, if the resolution applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d JIL. 190.1. After receiving the report from the accounting expert, the NCLT shall pass appropriate orders in the manner that, if any amount is found receivable by JIL/homebuyers of JIL, the same shall be made over to JIL from out of the said amount of INR 750 crores and accrued interest; and remainder thereof shall be returned to JAL in an appropriate account and that shall abide by the directions of the competent authority dealing with the proceedings concerning JAL. The NCLT would be expected to pass appropriate orders within 2 weeks of submission of report by the accounting expert. 190.2. However, we need to make it clear that this process of reconciliation is not meant for determination of any claim otherwise sought to be levied against JAL by IRP or homebuyers of JIL or by the resolution applicant; and only the accounts concerning the amount/s advanced to JAL by JIL towards construction contracts (vide paragraph 178.1.4.) are to be examined and reconciled with reference to the extent of liabilities discharged by JAL and then to find the extent of excessive amount, if any, available with JAL which is receivable by JIL/homebuyers of JIL. 191. In regard to the aforesaid dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it operational creditors or financial creditors. In the interest of justice, it is also made clear that disposal of the said sum of INR 750 crores shall otherwise not be treated as determinative of the rights and obligations of any stakeholder in any of these two companies, JAL and JIL. 192. Before closing on this point for determination, we may indicate that a few of the arguments on this point have gone off on a tangent, as could be noticed from the submissions made by an association of homebuyers of JAL, who has directly approached this Court against the order of NCLT, that INR 160 crores be designated out of the said amount of INR 750 crores for completing the houses of the members of that association; and that in RERA proceedings, JAL was demanding money from its members, though, there was unexplained delay of 5 to 7 years in completion of project by JAL. We are unable to find any logic in the submission of this nature against JAL by its homebuyers having been made in these proceedings. It goes without saying that the dealing between JAL and its homebuyers is not the subject matter of the present proceedings. Similarly, the submission by some of the dissatisfied homebuyers o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother transaction was questioned by IRP as being avoidable but the adjudicating authority held the same to be not falling within the relevant time as provided under Section 43 of the Code. The particulars of this transaction are as follows: Mortgage deed dated 12-5-2014 for 100 acres of land situated at Village Tappal, Tehsil Khair, District Aligarh, Uttar Pradesh executed by JIL in favour of ICICI Bank Ltd. against the facility agreement dated 12- 12-2013 granting term loan of Rs. 1500 crores and overdraft amount of Rs. 175 crores to JAL (hereinafter also referred to as "Property No. 7") (As regards this description, it is pointed out on behalf of the respondent ICICI Bank that it had been of "term loan of Rs. 1500 crores under the corporate rupee loan facility agreement and general conditions dated 12-12-2013 and mortgage deed was dated 10-3-2014")." 194.1. As noticed, in final determination of the relevant issues, this Court disapproved the order of NCLAT; and the order of NCLT was upheld in relation to six of these transactions with the finding that the transactions in question were hit by Section 43 of the Code and the Adjudicating Authority (NCLT) was justified in issui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mortgage, charge and encumbrance." 196. The Adjudicating Authority, in its impugned order dated 03.03.2020, while noticing the terms of the resolution plan and key reliefs, summarised the matter relating to the land mortgaged with JAL lenders in the following part of tabulation: - "Sl. No. Matter Relief Sought Remarks Cross Reference in Resolution Plan 3 858 acres of Corporate Debtor's land was mortgaged with JAL lenders to secure debt of JAL without any consideration or counter guarantee to JIL (Transaction). NBCC has sought relief that 858 acres of mortgaged land shall continue to be vested in Corporate Debtor free of any mortgage, charge and encumbrance. RP filed an application for avoidance of Transaction which was allowed by that Hon'ble NCLT vide order dated 16.05.2018 and 758 acres out of 858 acres was avoided. However, appeals were filed against the NCLT order dated 16.05.2018 and Hon'ble Supreme Court vide order dated 26.02.2020 has upheld the NCLT order dated 16.05.2018 . The Hon'ble SC has pronounce d the order with respect to the same on 26.02.202 0 in Civil Appeal No. 8512- 27 of 2019. Page 72 clause 1 of Schedule 3 of the Resolution Plan" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h ICICI Bank; and, as regards this mortgage, ICICI Bank was not recognised as a financial creditor of JIL even if falling in the category of secured creditors; the Adjudicating Authority has not rendered any specific decision as regards such mortgaged land and as regards the relief claimed by the resolution applicant while assuming that the entire matter stands concluded with the judgment of this Court dated 26.02.2020 in Anuj Jain (supra). 198. Now, the aforesaid terms of the resolution plan and the order of the Adjudicating Authority have given rise to two major issues. The first one is the grievance of ICICI Bank, who is the mortgagee in the said mortgage transaction relating to 'Tappal Property 1', that was not hit by Section 43 of the Code for having been entered into beyond the look-back period. 199. The mortgagee bank would submit that in terms of the judgment of this Court in Anuj Jain, the said mortgage in relation to 'Tappal Property 1' continues to remain in force and thereby, the bank is a secured creditor of the corporate debtor JIL; and this mortgage cannot be taken away through a resolution plan without assigning any value. It is submitted that the stipulations in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f all liabilities under such securities etc., other than continuation of guarantee benefits with the institutional financial creditors as laid down in the resolution plan. 201. Apart from the issue raised by ICICI Bank in relation to the said mortgaged land of 100 acres, another issue raised by some of the homebuyers is that adequate provisions have not been made in the resolution plan in relation to 758 acres of land, that was earlier covered by the other six mortgage transactions but now stands released from encumbrance. 202. Having examined the matter in its totality, we find force in the submissions so made by the mortgagee bank as also by the homebuyers. 203. The resolution applicant has overtly relied upon the fact that the objector bank was not accepted as a financial creditor of JIL by this Court in Anuj Jain (supra) and has contended on this basis that the objections so raised by this bank are required to be rejected. These submissions of the resolution applicant NBCC suffer from several shortcomings. Even when the said bank has not been recognised as a financial creditor because the mortgage in question was not relating to any financial debt of the corporate debtor JIL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of JAL, the issue had already been decided by the Supreme Court and need not be reiterated. In this entire process of mistakes/errors (might be accidental) and corrections as also cursory observations, the Adjudicating Authority totally missed out that one transaction relating to 100 acres of land, being 'Tappal Property 1', remained unaffected by the judgment in Anuj Jain (supra); and that the security creating over this land could not have been annulled in the manner suggested in the plan. 204. It cannot be denied that the claim of ICICI Bank pertaining to the said mortgage over 100 acres of land was not reckoned in the CIRP of JIL and without any specific provision in that regard, the resolution applicant merely suggested by way of the Clause 23 of Schedule 3 as if such mortgage shall stand annulled and the land shall vest in the corporate debtor free from any encumbrances. To say the least, the said Clause 23 does not appear to be standing in conformity with any principal of law for discharge of a security interest, particularly of a third party who is not included in the insolvency resolution process of a corporate debtor. We would hasten to make it clear that the capacit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V, conversion of Admitted Financial Debt due to the Institutional Financial Creditors to equity, subscription of debentures by the Corporate Debtor or transfer of shares of the Land Bank SPV from the Corporate Debtor to Institutional Financial Creditors." 208. The observations by the Adjudicating Authority as regards this clause are that since reduction of the share capital of corporate debtor is not a part of the resolution plan, the Adjudicating Authority 'cannot waive the procedure for reduction of share capital in relation to the companies not yet incorporated'. 209. When the resolution plan with all its reliefs and concessions was approved by CoC and the plan was otherwise being approved by the Adjudicating Authority (albeit with modifications), the aforesaid observations in regard to Clause 7 of 'reliefs and concessions' cannot be said to be of apt dealing with the relief sought. Be that as it may, having regard to the purport and purpose of the said Clause 7 and its approval by CoC, we find no reason as to why the same may not be approved. Hence, the impugned order of the Adjudicating Authority dated 03.03.2020 shall be read as modified and in approval of the said Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anism which is not envisaged by the Code. 213. The Code lays down detailed procedure for corporate insolvency resolution process and such a proposition, for constitution of any Interim Monitoring Committee during the pendency of appeal before the Appellate Authority (NCLAT) is neither envisaged by law nor appears justified. It is apparent on a bare perusal of sub-section (3) of Section 61 of the Code that any challenge to the order approving a resolution plan under Section 31 could be maintained only on the grounds specified therein. Obviously, while dealing with such appeals, the Appellate Authority is required to remain within the confines of the boundaries delineated by the Code rather than seeking to provide for a mechanism, for implementation of the plan. 214. Moreover, looking to the peculiar features of this resolution process, which has its own complications, constitution of such a Committee, consisting only of the resolution professional, the resolution applicant and the institutional financial creditors while leaving aside the biggest chunk of stakeholders i.e., the homebuyers (having more than 57% of the voting share in the CoC), would have caused more difficulties in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on plan and in not sending the matter back to the Committee of Creditors for reconsideration. E. The Adjudicating Authority has erred in issuing directions to the resolution applicant to make provision to clear the dues of unclaimed fixed deposit holders. Paragraph 125 of the impugned order dated 03.03.2020 is set aside. F. The issues related with the objections of YES Bank Limited and pertaining to JHL, the subsidiary of the corporate debtor JIL, are left for resolution by the parties concerned, who will work out a viable solution in terms of paragraphs 141 and 142 of this judgment. G. In the overall scheme of the resolution plan, the stipulation in Clause 21 of Schedule 3 thereof cannot be said to be unfair; and the observations in paragraphs 132 and 133 of the order dated 03.03.2020 justly take care of the right of any aggrieved party (agreement holder) to seek remedy in accordance with law and ensures viability of the resolution plan. H. It cannot be said that the resolution plan does not adequately deal with the interests of minority shareholders. The grievances as suggested by the minority shareholders cannot be recognised as legal grievances. Their objections stand r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of 758 acres, that has become available to JIL free from encumbrance, in terms of the judgment dated 26.02.2020 of this Court in the case of Anuj Jain (supra). L. (i) The impugned order dated 03.03.2020 shall be read as modified in relation to Clause 7 of Schedule 3 of the resolution plan; and the said clause shall stand approved. (ii) As regards possession/control over the project sites/lands of JIL, it is left open for the resolution applicant to take recourse to the appropriate proceedings in accordance with law, whenever occasion so arise. M. The Appellate Authority was not justified in providing for an Interim Monitoring Committee for implementation of the resolution plan in question during the pendency of appeals. The impugned order dated 22.04.2020 passed by NCLAT is set aside. 217. The net result of the discussion and findings hitherto is that some of the terms and stipulations of the resolution plan of NBCC, which was voted for approval by 97.36% of the voting share of the Committee of Creditors, do not meet with approval. Although, barring such terms and stipulations, all other terms and propositions of the resolution plan stand approved. To be specific, the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culiarities of the case and later amendment to IBC whereby, the doubts about the status of homebuyers were removed and they were duly accorded the recognition as financial creditors. Then, in the judgment dated 06.11.2019 in Jaiprakash Associates Ltd. (supra), this Court provided another period of 90 days for completion of the CIRP from the date of judgment, after observing that delay in completion of CIRP was attributable to the process of law and neither the homebuyers nor any other financial creditor was to be blamed for pendency of the proceedings. This Court also observed that extraordinary situation had arisen because of constant experimentation at different levels due to lack of clarity on the matters crucial to the decision making process of CoC and besides, there had been further legislative changes whereby, the scope of resolution plan was expanded. This Court also took note of the fact that there was unanimity amongst all the parties appearing before the Court that liquidation of JIL must be eschewed and an attempt be made to salvage the situation by finding out some viable arrangement which could subserve the interests of all concerned. The Court further took into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers. 223. Taking all the facts and circumstances into account and in keeping with the spirit and purport of the orders passed in the past, we are inclined to again exercise the powers under Article 142 of the Constitution of India and to enlarge the time for completion of CIRP concerning JIL while extending opportunity to the said resolution applicants Suraksha Realty and NBCC to submit modified/fresh resolution plans, which are compliant with the requirements of the Code and the CIRP Regulations and are in accord with the observations and findings in this judgment. 223.1. We are conscious of the requirements of the discipline of IBC and would hasten to observe that the course which is being adopted is in the complex and peculiar features of this case but, this repeat exercise concerning the CIRP of JIL cannot be an unending process and needs to be taken to its logical conclusion. As regards the time frame, we are inclined to proceed on the theme and spirit of the judgment dated 06.11.2019 wherein, first 45 days were allowed for invitation of resolution plan and consideration by CoC. The later part of the extended time was provided for removing any difficulty and for passing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of JIL, we conclude on these matters with the following order: 225.1. The matter regarding approval of the resolution plan stands remitted to the Committee of Creditors of JIL and the time for completion of the process relating to CIRP of JIL is extended by another period of 45 days from the date of this judgment. 225.2. We direct the IRP to complete the CIRP within the extended time of 45 days from today. For this purpose, it will be open to the IRP to invite modified/fresh resolution plans only from Suraksha Realty and NBCC- Only these resolution applicants were permitted to submit the revised plans in the judgment dated 06.11.2019. respectively, giving them time to submit the same within 2 weeks from the date of this judgment. 225.3. It is made clear that the IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum. The said resolution applicants shall be expected to proceed on the basis of the information memorandum already issued by IRP and shall also take into account the facts noticed and findings recorded in this judgment. 225.4. After receiving the resolution plans as aforementioned, the IRP ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
