TMI Blog2021 (3) TMI 1143X X X X Extracts X X X X X X X X Extracts X X X X ..... urity interest of lenders - Interim Monitoring Committee for implementation of the resolution plan. Contours of the jurisdiction of Adjudicating Authority in dealing with a resolution plan - HELD THAT:- The Adjudicating Authority has limited jurisdiction in the matter of approval of a resolution plan, which is welldefined and circumscribed by Sections 30(2) and 31 of the Code read with the parameters delineated by this Court in the decisions abovereferred. The jurisdiction of the Appellate Authority is also circumscribed by the limited grounds of appeal provided in Section 61 of the Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by the CoC. Within its limited jurisdiction, if the Adjudicating Authority or the Appellate Authority, as the case may be, would find any shortcoming in the resolution plan vis- -vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat any claim made by any fixed deposit holder within the stipulated time was not taken into account by IRP - there are no justification for the directions contained in paragraph 125 of the order passed by NCLT. Those directions are required to be annulled. Objections of the financial creditor of subsidiary of the corporate debtor - HELD THAT:- There are no reason to say anything further on this score and would leave the parties to work out a viable solution in the best interest of all the stakeholders; and for that purpose, the parties concerned, if necessary, may seek appropriate orders from NCLT, as regards mode and modalities of the process to be carried out. Grievance of agreement holders - HELD THAT:- Looking to the nature of dealings and the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aiming at profiteering by getting hold of this money but without making corresponding provision in the resolution plan for the appropriate use of this money for the benefit of homebuyers, also remains baseless and redundant in view of what has already been discussed hereinbefore. Another block of submissions on behalf of some of the homebuyers of JIL, like seeking directions against NBCC that it shall not withdraw and should expedite construction as also seeking audit over the quality of construction, have gone far too beyond the real issues requiring determination in the present litigation. In regard to these and other submissions of similar nature, we would only leave the parties to take recourse to appropriate remedies in accordance with law, in case of any legal grievance existing or arising in future. Security interest of the lenders of JAL and effect of judgment dated 26.02.2020 - HELD THAT:- 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. 3395 OF 2020 - - - Dated:- 24-3-2021 - CIVIL APPEAL No.3396 of 2020, T.C (C) Nos. 234, 235, 236, 237, 238, 239, 240, 241, 242, 243 of 2020, Civil Appeal No. 1056 of 2021 @ SLP(C) No. 5144 of 2021@ Diary No. 18129 of 2020, Civil Appeal No. 1057 of 2021 @ SLP(C) No. 10543 of 2020 and Diary No. 20274 of 2020 JUSTICE A.M. KHANWILKAR, JUSTICE DINESH MAHESHWARI And JUSTICE SANJIV HANNA For the Appellant : Mr. Kunal Chatterji, AOR Mr. Siddharth Luthra, Sr. Adv. Mr. Joel, AOR Mr. Amit Dwivedi, Adv. Mr. Keshav Maheshwari, Adv. Ms. Sneha, Adv. Mr. Amit Kumar Mishra, Adv. Mr. Shashank Manish, AOR Ms. Nidhi Sahay, Adv. Ms. Manasi Chatpalliwar, Adv. Mr. Shivam Pandey, Adv. Mr. Ritin Rai, Sr. Adv. Mr. Raghavendra M. Bajaj, Adv. Ms. Garima Bajaj, AOR Mr. Nikhil Bimal, Adv. Mr. Agnish Aditya, Adv. Ms. Gunjan Mathur, Adv. Ms. Aditi Rao, Adv. Mr. Vishal Gupta, AOR Mr. Soumya Dutta, AOR Mr. Tanvir Nayar, AOR Mr. Rohan Jaitley, Adv. Mr. Akshay Sharma, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereinafter also referred to as JAL and its stakeholders have several questions over the resolution process in question and are particularly concerned with the sum of INR 750 crores, which was deposited by JAL pursuant to the orders passed by this Court in the first round of litigation. 3. Looking to a multiload of issues arising from variegated propositions/objections put forward by different parties, it appears appropriate to draw a brief outline and sketch of the matter at the outset. Brief outline and sketch 4. The cases involved in this batch have got assimilated in this Court in the following circumstances: 4.1. The corporate insolvency resolution process in relation to the corporate debtor JIL got initiated on 09.08.2017 when the National Company Law Tribunal-( Hereinafter also referred to as the Adjudicating Authority or NCLT . As shall be noticed, the matter before the Allahabad Bench was later on transferred to the New Delhi Bench of the Tribunal. These expressions 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to the third member. In the meantime, IDBI Bank sought exclusion, of the period of pendency of the application for such clarification as to the voting percentage, from the period of 270 days for completion of CIRP. While this application was pending, NCLT called upon the concerned parties to file reply on the necessity to proceed further with the CIRP, for considering the resolution plan received from the bidder, subject to the outcome of the pending application. The orders passed by NCLT in relation to these aspects were challenged before the National Company Law Appellate Tribunal, New Delhi- Hereinafter also referred to as the Appellate Authority or NCLAT . The Appellate Authority, by its judgment dated 30.07.2019, provided for exclusion of 90 days for the purpose of counting the total period of 270 days and disposed of the appeals with some more observations. This gave rise to further appeals in this Court, led by Civil Appeal No. 8437 of 2019 [@ D No. 27229 of 2019]: Jaiprakash Associates 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proval of the resolution plan in terms of Section 30(6) read with Sections 31 and 60(5) of the Code and Regulation 39(4) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016- Hereinafter also referred to as the CIRP Regulations . Later on, the proceedings pending before the Allahabad Bench of the National Company Law Tribunal were transferred to its Principal Bench at New Delhi wherein, several objections/suggestions/propositions were submitted by different stakeholders, going for or against the resolution plan or even off on a tangent. 4.6. By its order dated 03.03.2020, the Adjudicating Authority (NCLT), proceeded to approve the resolution plan with some modifications and certain directions while accepting some of the objections like those of the dissenting financial creditor bank and the land providing agency but while rejecting some other, including those of the holding company of JIL and while leaving a few propositions open for adjudication 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 app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 03.03.2020, as passed by the Adjudicating Authority (NCLT) in approval of the resolution plan with certain directions and modifications, are the pivots of the present litigation and a subsidiary of these pivots is the interim order dated 22.04.2020, as passed by NCLAT in the appeal filed by the resolution applicant NBCC, providing for composition of an Interim Monitoring Committee while implementing the resolution plan. The parties and their respective roles and interests in the matter 6. For what has been noticed in the outline, and in view of the adjudication required of various issues raised and different reliefs claimed in these matters, with several parties carrying different roles and status, worthwhile it would be to narrate, in brief, the relevant particulars of the key parties involved, with their feasible classification in terms of their respective interests.- This introduction of persons/entities is to broadly co-relate the parties with the points to be taken up for determination; and is not intended to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g dealing with the claims of a variety of creditors; making an application for avoidance of certain transactions as being preferential, which was finally dealt with and accepted by this Court in the aforementioned judgment dated 26.02.2020; presenting the resolution plans for voting by CoC; and submitting the approved resolution plan to the Adjudicating Authority. In relation to the order dated 03.03.2020 as passed by NCLT, the appeal filed by him before NCLAT, essentially questioning the jurisdiction of NCLT to modify the resolution plan and to change the mode of payment to the dissenting financial creditors, being Company Appeal (AT) (Insolvency) No. 486 of 2020, stands transferred to this Court and is registered as T.C. (C) No. 234 of 2020. He is respondent in almost all other cases. 8. The major set of parties who stand for the approved resolution plan and seek its implementation while stating objections/grievances against the modification parts of the order dated 22.04.2020 as passed by NCLAT and the order dated 03.03.2020 as passed by NCLT are the following: 8.1. NBCC (India) Limited (NBCC): NBCC (India) Limited is the resolution applicant and had prepared the resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ev Mishra and 2 others: They are also individual homebuyers of the flats in the development projects initiated by JIL. They are applicants of I.A. No. 87967 of 2020 in Civil Appeal No. 3395 of 2020 and similarly submit that the resolution plan as approved by NCLT deserves to be implemented without further delay. 8.6. Major General Praveen Kumar and Colonel V.S. Gaur: They are the homebuyers who have moved applications for impleadment/intervention in Civil Appeal No. 3395 of 2020, being I.A. Nos. 73323 of 2020 and 73330 of 2020 respectively, essentially seeking directions to NBCC to complete the remaining works on priority basis in Tower Nos. 5 to 12 and 14 to 16 in Kensington Park 1, Jaypee Greens, Noida so that the possession of flats could be handed over to the buyers. The objectors 9. The persons/entities who carry grievance/s against the resolution plan for one reason or the other; and/or who are dissatisfied with the order passed by the NCLT and/or by the NCLAT, may be grouped with reference to the objections/propositions they stand for. 10. The first set of objectors consists of such persons/entities who otherwise belong to the class of homebuyers but have the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Ashish Mohan Gupta Anr.: These are the homebuyers who seek to oppose the resolution plan while raising questions over the proceedings of the Committee of Creditors as also on various other grounds, which may be running common to the grounds urged by the homebuyers/associations who are objecting to the plan and its approval. They had filed Company Appeal (AT) (Insolvency) No. 489 of 2020 before NCLAT that stands transferred to this Court and is registered as T.C. (C) No. 242 of 2020. 10.4. Jaypee Orchard Resident Welfare Society: This is another society of homebuyers in the projects of JIL who seeks implementation of the projects of JIL but has its own reservations on 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 in terms of RERA. This society has not filed the appeal before NCLAT but in view of other appeals having been withdrawn to this Court, has preferred the petition for special leave to appeal, being SLP Diary No. 18129 of 2020 in this Court, seeking to challenge the said order dated 03.03.2020. 10.5. Ishwar Kewalramani and 76 Others: These are the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NCLAT against the said order dated 03.03.2020, being Company Appeal (AT) (Insolvency) No. 544 of 2020 that stands transferred to this Court and is registered as T.C. (C) No. 237 of 2020. 12.3. Knights Court Social Welfare Association: This is an association representing the homebuyers in the Knights Court project of JAL who are aggrieved by the fact that the project has been left incomplete by JAL and who are equally aggrieved by the provision made in the resolution plan of JIL for utilisation of the said amount of INR 750 crores. This association has directly challenged the said order of NCLT dated 03.03.2020 in this Court by way of Special Leave Petition (Civil) No. 10543 of 2020. 12.4. Manoj Gaur, suspended MD of corporate debtor JIL: He is the suspended Managing Director of the corporate debtor JIL and has also stated himself to be the Executive Chairman of JAL. He has been arrayed as third respondent in the appeal filed by IRP. It is also noticed that he, along with the holding company JAL, filed an impleadment application (I.A. No. 1508 of 2020) in the appeal filed by NBCC that was allowed by NCLAT on 15.07.2020 and that is how he became the seventh respondent in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain areas of concern of this Authority, who had filed its objections to the resolution plan. The directions issued in modification of the resolution plan in regard to YEIDA is also one of the major grounds of challenge by the persons/entities standing in favour of the resolution plan. 14.2. YES Bank Limited: This bank is the financial creditor of a wholly-owned subsidiary of JIL, being Jaypee Healthcare Limited- JHL for short . This bank asserts that the assets of JHL, said to be mortgaged with it, are not within the purview of CIRP of JIL to be disposed by NBCC; and it seeks modifications in the resolution plan accordingly. This bank filed an appeal before NCLAT against the said order dated 03.03.2020, being Company Appeal (AT) (Insolvency) No. 488 of 2020 that stands transferred to this Court and is registered as T.C. (C) No. 235 of 2020. 14.3. Rajesh Gupta and 2 others: These three persons, said to have entered into respective agreements with the corporate debtor, carry their own grievance against the prescription in the resolution plan where the resolution applicant has reserved its right to cancel such agreements/sub-lease deeds. They seek direction for entering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e s rights and obligations under the Concession Agreement with YEIDA, to the SPVs proposed to be incorporated; and has also erred in modifying the relevant stipulations? (iii) As to whether the Adjudicating Authority has erred in not approving the reliefs and concessions sought for in the resolution plan in relation to YEIDA? D. As to whether the Adjudicating Authority has erred in not approving the treatment of dissenting financial creditor like ICICI Bank Limited in the resolution plan, as being not in accord with Section 30(2)(b) of the Code read with Regulation 38(1)(b) of the CIRP Regulations; and has erred in modifying the terms of resolution plan and in directing payment to the dissenting financial creditor in monetary terms? E. As to whether the Adjudicating Authority has erred in modifying the step provided in the resolution plan in regard to the fixed deposit holders and in directing the resolution applicant to make provision towards the dues of unclaimed fixed deposit holders also? F. (i) As to whether the resolution plan unauthorisedly purports to deal with the assets of Jaypee Healthcare Limited? (ii) As to whether the Adjudicating Authority has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n providing for an Interim Monitoring Committee for implementation of the resolution plan in question during the pendency of appeals? N.What should be the final order and relief? Relevant factual and background aspects 16. For determination of the points so arising, we need to examine the relevant provisions contained in IBC and CIRP Regulations and apply the same to the process related with consideration and approval of the resolution plan in question; and to the terms, prescriptions and stipulations of the impugned resolution plan as also to the modifications, as ordered (or as declined) by the Adjudicating Authority (NCLT) in the impugned order dated 03.03.2020. However, in the given set of facts and circumstances, before examining the relevant provisions and before dilating on the relevant features of the resolution plan and the order impugned, it is expedient to take note of the crucial background aspects relating to the present CIRP and key attributes of the orders passed by this Court in previous rounds of litigation concerning this very CIRP. 17. For a clearer picture of the subject matter of this litigation, a few glimpses of the relevant history shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Uttar Pradesh proceeded to acquire land for laying of the Expressway; and also proceeded to acquire additional land along the road for development of the same for commercial, amusement, industrial, institutional and residential purposes. 17.4. Coming on the heels of this project and in terms of the said Clause 18.1 of CA, the corporate debtor Jaypee Infratech Limited ( JIL ) was set up as a special purpose vehicle by the concessionaire and thereafter, the rights and obligations under CA were transferred to JIL by way of an assignment agreement dated 19.10.2007 and deed of agreement dated 27.11.2007. In this manner, the corporate debtor JIL came to be accepted as the concessionaire. Later on, by way of a notification dated 11.07.2008, Taj Expressway Industrial Development Authority was renamed as Yamuna Expressway Industrial Development Authority ( YEIDA ). The net result of the dealings aforesaid has been that the rights and obligations under the said Concession Agreement dated 07.02.2003 now relate to the corporate debtor JIL as the concessionaire and YEIDA as the land providing agency. 17.5. As noticed, the corporate debtor JIL was set up as the SPV by the original conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, those petitions were dealt with by this Court as a batch, led by the case of Chitra Sharma (supra). Several orders were passed by this Court in the said batch of petitions from time to time, inter alia, to the effect that IRP was permitted to take over the management of JIL and was directed to ensure that necessary provisions were made to protect the interests of homebuyers. Various orders were also made with directions to JAL, as 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, this Court took note of the interests of homebuyers as also the creditors of JAL and JIL; and also took note of the status of proceedings and the statutory provisions as then obtaining, including the fact that the statutory period of 180 days, and even the extended period of 90 days, for concluding the CIRP had come to an end but then, by way of the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, which came into force on 06.06.2018, the doubts about the status of homebuyers were removed and they were expressly recognised as financial creditors of the corporate debtor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) IRP shall take over the management of JIL and formulate interim resolution plan with necessary provision to protect the interests of homebuyers; (ii) Mr. Shekhar Naphade, learned senior counsel along with Ms. Shubhangi Tuli, AOR shall participate in the meetings of CoC to espouse the cause of the homebuyers and to protect their interests; the Director or Managing Director of JIL or JAL on the date of institution of insolvency proceedings as also on the date of order, except the nominee Directors of lending institutions, shall not leave the country without prior permission of the Court; and all the suits and proceedings against JIL shall remain stayed in terms of Section 14(1)(a) of the Code. In addition, this Court also directed JAL to deposit a sum of INR 2,000 crores and provided that if any assets or property of JAL had to be sold for the purpose, that should be done after obtaining prior approval of this Court. For its relevance, the aforesaid order dated 11.09.2017, carrying significant observations and material directions of this Court, which are of bearing on a substantial part of the present litigation, could be extracted, in extenso, as under: - All the applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the interest of the purchasers may be protected. It is also argued that if the IRP is restored, there should be a representative from the homebuyers or this Court may appoint someone on this Committee of Creditors and espouse the interests of the homebuyers. Having heard the learned counsel for the parties at length, in modification of the order dated 4-9-2017, we issue the following directions: a) The IRP shall forthwith take over the Management of JIL. The IRP shall formulate and submit an interim resolution plan within 45 days before this Court. The interim resolution plan shall make all necessary provisions to protect the interests of the homebuyers; b) Mr Shekhar Naphade, learned Senior Counsel along with Ms Shubhangi Tuli, Advocate-on-Record, shall participate in the meetings of the Committee of Creditors under Section 21 of the Insolvency and Bankruptcy Code, 2016 to espouse the cause of the homebuyers and protect their interests; c) The Managing Director and the Directors of JIL and JAL shall not leave India without the prior permission of this Court; d) JAL which is not a party to the insolvency proceedings, shall deposit a sum of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also submitted by the counsel for IRP that the rights under the Concession Agreement belonged to JIL, which was subject to proceedings under the IBC and therefore, such a request could not be granted. However, the time for depositing INR 2,000 crores was extended until 05.11.2017. The relevant part of order dated 25.10.2017 reads as under: - It is submitted by Mr Kapil Sibal and Mr Mukul Rohatgi, learned Senior Counsel appearing for the applicant that JAL may be permitted to transfer its rights under the concession agreement in respect of Yamuna Expressway. The same is seriously opposed by Mr K.K. Venugopal, learned Attorney General for India, Dr Abhishek Manu Singhvi, learned Senior Counsel appearing for the IDBI Ltd. and Mr Ravindra Kumar, learned counsel appearing for the Yamuna Expressway Industrial Development Authority. It is also submitted by Mr Parag P. Tripathi, learned Senior Counsel representing the Interim Resolution Professional (IRP) that the rights under the concession agreement in respect of Yamuna Expressway are of Jaypee Infratech Ltd. (JIL), which is subject to proceeding under the Insolvency and Bankruptcy Code and, therefore, it cannot be transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide him a sum of INR 5 lakhs. The relevant part of order dated 22.11.2017 reads as under: - It is submitted by learned Senior Counsel appearing for Jaiprakash Associates Ltd. (JAL) that the company is ready with ₹ 275 crores. The homebuyers raised their concern about the realisation of the amount. This Court appreciates the grievance and the concern of the homebuyers. We think it would be appropriate to direct as follows: (a) A demand draft of ₹ 275 crores be deposited by Mr Anupam Lal Das, learned counsel appearing for the company, before the Registry of this Court, today. (b) A sum of ₹ 150 crores be deposited by 13-12-2017. (c) A further sum of ₹ 125 crores be deposited by 31-12-2017. (d) Neither the independent Directors nor the promoter Directors shall alienate their personal properties or assets in any manner, and if they do so, they will not only be liable for criminal prosecution but contempt of the court. (e) That apart, we also direct that the properties and assets of their immediate and dependent family members should also not be transferred in any manner, whatsoever. Needless to say that direction fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portal created by Mr Pawanshree Agarwal qua Jaypee Infratech Ltd. (JIL) shall be kept alive. (iv) The application filed by Reserve Bank of India seeking permission to move NCLT shall be considered at a later stage. (v) The independent Directors of JAL need not remain personally present on every date of hearing unless so directed by this Court. The independent Directors shall not leave the country without leave of this Court. (vi) The earlier order of injuncting JAL to create any kind of thirdparty interest in the assets is reiterated. (vii) The applications for impleadment/intervention and directions filed before this Court shall be served on Mr Pawanshree Agarwal. 20.6. Further effective proceedings took place on 21.03.2018 when it was stated on behalf of JAL that INR 550 crores had already been deposited and that only about 8% of homebuyers were interested in seeking refund while others were desirous of seeking possession of their flats. This Court indicated that at the given stage, only the matter in relation to the homebuyers seeking refund was being examined and other grievances shall be examined in the next phase of proceedings. Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hushan and Mr Sanjay Hegde and others, learned Senior Counsel appearing for some Associations of homebuyers who intend to have their flats. As our order for deposit of ₹ 2000 crores has not been complied with, we intend to pass the following directions: (a) JAL shall deposit a further sum of ₹ 200 crores in two instalments, as agreed by the Managing Director who is present in Court today. The first instalment of ₹ 100 crores shall be deposited by 15-4-2018 and the second instalment of ₹ 100 crores shall be deposited by 10-5-2018; (b) It is submitted by Mr Pawanshree Agrawal, learned Amicus Curiae that as per his portal an amount of ₹ 1300 crores, at present, is required to be refunded towards the principal sum for those homebuyers who, as of today, seek refund. The figure of ₹ 1300 crores is as per the record of JAL. In view of the aforesaid, we would require Mr Agrawal to prepare a projectwise chart indicating the number of persons in respect of that project and the stage of completion of the respective projects so that appropriate order can be passed for disbursement of the amount on pro rata basis to the homebuyers; (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed a little later, it has appeared in the final judgment passed in the case of Chitra Sharma that the referred representation had been in relation to the prayer of JAL to participate as one of the intending bidders in the resolution plan which was being formulated by the IRP; and such a participation by JAL was impermissible in view of Section 29A introduced to the Code. 20.8. Thereafter, on 16.05.2018, apart from dealing with another application filed by an independent Director of JAL seeking permission to travel abroad, this Court took note of the fact that a sum of INR 750 crores was lying in deposit and it was observed that the same has to be disbursed on pro rata basis amongst the homebuyers . It was also directed that JAL, the holding company of JIL, shall deposit a further sum of INR 1,000 crores jointly and severally by 15.06.2018 subject to which, stay was granted over further proceedings, only insofar as concerning the liquidation. The relevant part of this order dated 16.05.2018 reads as under: - Having heard the learned counsel for the parties at length, it is directed that Jaiprakash Associates Ltd. (JAL), the holding company of Jaypee Infratech Ltd. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.1. In final judgement dated 09.08.2018 in the case of Chitra Sharma (supra), this Court took note of the past proceedings and also the fact that when resolution plans were considered and examined by the CoC, JAL too submitted its proposals which were rejected in view of the bar contained in Section 29A IBC as also for the reason that JAL failed to convince the CoC of its ability to tie up the funds for construction. However, even the other plans could not muster the support of the requisite majority in CoC. Accordingly, IRP informed NCLT that no resolution plan was approved by the CoC even within the extended period for completing the CIRP, which came to an end on 12.05.2018. This Court took note of the mandate of Section 33 IBC whereby liquidation follows upon rejection of a resolution plan but then, noticed unanimity of the parties during the course of hearing that the liquidation of JIL was not going to subserve the interests of the homebuyers who had made valuable investments by contributing their hard-earned money in the hope of obtaining a roof over their heads. This Court also observed that a home for the family was considered to be a part of the right to life and took n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. However, this is subject to the condition that the Court should allow it to dispose of identified cement assets including its cement plan (sic) at Rewa in Madhya Pradesh. In order to enable it to do so, JAL has sought a direction to the NCLT at Allahabad to decide the application filed before it for sanctioning a scheme of arrangement, propounded pursuant to a master restructuring agreement signed and accepted by the 32 creditors. JAL seeks to continue the stay of liquidation proceedings against its deposit of postdated cheques of ₹ 600 crores. JAL also seeks a stay on the direction of this Court allowing the IRP to remain in management. 22.2.1. After careful consideration, this Court rejected the proposal submitted on behalf of JAL while explaining that accepting any such proposal on behalf of JAL would cause serious prejudice to the discipline of IBC. In that regard, this Court referred to the provisions contained in Section 29A of the Code and the background in which certain specified persons were made ineligible to be the resolution applicants. - We may point out that Section 29A was inserted to the Code along with a few other amendments by way of the Ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tance by this Court as follows: - 40. Mr Anand Grover appearing on behalf of the homebuyers has opposed the proposal submitted by JAL/JIL on the following grounds: 40.1. Loans given to JAL have been classified as nonperforming assets which renders JAL ineligible as a resolution applicant/new promoter under Section 29-A(b) IBC; 40.2. In addition to Section 29-A(b), JAL is also disqualified under Section 29-A(g) IBC. Section 29-A(g) provides that a person who is engaged in a fraudulent transaction should not be allowed to bid for another company as such a person may again engage in fraudulent transactions. In May 2018, the NCLT, Allahabad set aside a fraudulent transaction involving a mortgage of around 750 acres of JIL s land in favour of the lenders of JAL. This mortgage was without any consideration and the land of 750 acres may be worth INR 5000 crores. The matter is now before the NCLAT, which has specifically framed an issue in this regard; 40.3. RBI is already before this Court seeking initiation of insolvency proceedings against JAL. JAL s proposal, although presented under the garb of protecting the interest of homebuyers, is aimed at the twin benefits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40.11. JAL is undergoing a serious financial crisis. This is clear from the following facts: 40.11.1. JAL has not yet honoured the order of this Court asking it to deposit ₹ 2000 crores for protection of the interest of the homebuyers. JAL has paid only ₹ 750 crores out of ₹ 2000 crores, after the expiry of almost 10 months from 11-9-2017 which was the date of the initial order of this Court; 40.11.2. JAL has failed to pay even the latest instalment of ₹ 1000 crores by 15-6-2018 in accordance with the order of this Court dated 16-5-2018; 40.11.3. JAL is a defaulter of more than 30 banks to the extent of around ₹ 30,000 crores. JAL has also defaulted on fixed deposits, foreign currency convertible bonds and payments to Noida Authority; 40.11.4. Even in the latest proposal, the proposal to deposit ₹ 600 crores is spread over time indicating that JAL has no resources; and 40.11.5. The proposal of doubling the strength of workers from 4000 to 8000 would only mean doubling the strength from 17 workers per tower to 35 workers per tower (228 towers to be built by 8000 workers). This would amount to 2 workers in each fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement of balancing the discipline of the Code, to do complete justice and to secure the interests of all the concerned, this Court found it just and proper to accept the suggestion that CIRP be revived and CoC be reconstituted as per the amended provisions of IBC with recourse to the powers under Article 142 of the Constitution of India. This Court observed and held as under: - 47. In considering the rival submissions, several important facets of the case need to be underscored. 47.1. First and foremost, the CIRP was initiated on 9-8-2017, following the order of NCLT admitting the proceedings. The period of 180 days for concluding the CIRP came to an end on 6-2-2018 and the extended period ended on 12-5-2018. When the CIRP was initiated and until the period of 270 days concluded, the homebuyers did not have the status of financial creditors under the provisions of IBC. They had no statutory voting rights in the CoC. Under the interim directions of this Court, a workable arrangement was sought to be put into place by appointing a representative of the homebuyers on the CoC to facilitate their interests being duly borne in mind. But the point to be noted is that in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Court appointing a committee to supervise the resolution process outside IBC will involve the Court in an insuperable burden of evaluating intricate matters of financial expertise on which Parliament has legislated to create specific mechanisms. 47.4. We are emphatically of the view that it would not be appropriate for the Court to appoint a committee to oversee the CIRP and assume the task of supervising the work of the Committee. We must particularly be careful not to supplant the mechanisms which have been laid down in the IBC by substituting them with a mechanism under judicial directions. Such a course of action would in our view not be consistent with the need to ensure complete justice under Article 142, under the regime of law. Hence, the power under Article 142 should be utilised at the present stage for the limited purpose of recommencing the resolution process afresh from the stage of appointment of IRP by the order dated 9-8-2017 and resultantly renew the period which has been prescribed for the completion of the resolution process. We have furnished above, the reasons for doing so. Chief amongst them is the fact that in the present case the period of 270 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be considered with empathy. Yet, having given our anxious consideration to the plea and on the balance, we are not inclined to accede to it for more than one reason. 48.1. Firstly, during the pendency of the CIRP, it would as a matter of law, be impermissible for the Court to direct a preferential payment being made to a particular class of financial creditors, whether secured or unsecured. For the present, we leave open the question as to whether the homebuyers are unsecured creditors (as was urged by Mr Tripathi) or secured creditors (as was urged by counsel appearing for them). Directing disbursement of the amount of ₹ 750 crores to the homebuyers who seek refund would be manifestly improper and cause injustice to the secured creditors since it would amount to a preferential disbursement to a class of creditors. Once we have taken recourse to the discipline IBC, it is necessary that its statutory provisions be followed to facilitate the conclusion of the resolution process. 48.2. Secondly, the figures which have been made available presently, following the opening of the web portal by the Amicus Curiae, indicate that 8% of the homebuyers have sought a refun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in respect of which directions have been issued to banks for initiating insolvency resolution. Subsequently, the IAC recommended that in respect of those accounts where 60% or more had been classified as NPAs as on 30-6-2017, banks may be directed to implement a viable resolution plan within six months failing which the accounts may be directed for a reference under the IBC by 31-12-2017. JAL was one such entity. No viable resolution plan could be found as a result of which it is also required to be referred for CIRP. RBI has carried out this exercise as a matter of economic policy in its capacity as the prime banking institution in the country, entrusted with a supervisory role, and the power to issue binding directions .. (emphasis in bold supplied) 22.6. Having said so, this Court acceded to the request made on behalf of the RBI to initiate a CIRP against JAL under IBC and thereafter proceeded to conclude on the matter with the following directions: - 50. We, accordingly, issue the following directions: 50.1. In exercise of the power vested in this Court under Article 142 of the Constitution, we direct that the initial period of 180 days for the conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the situation in the judgment dated 06.11.2019 in the case of Jaiprakash Associates Ltd. (supra). For their relevance, the observations made and directions issued in that case may also be recapitulated. 25. The second round of litigation concerning this CIRP came up to this Court in the following circumstances: 25.1. Consequent to the aforesaid directions in the case of Chitra Sharma, the matter proceeded before the NCLT being the Adjudicating Authority. The IRP issued public notice inviting claims from all the stakeholders of JIL, including the homebuyers and submitted his report on formation of the Committee of Creditors before the Adjudicating Authority on the following basis: 37.3% in case of financial institutions, 62.3% homebuyers, and 0.4% fixed deposit holders. 25.2. However, on 17.09.2018, an application came to be made before the Adjudicating Authority by one of the associations of homebuyers seeking clarification as to the manner in which the voting percentage of the homebuyers would be reckoned. The two members of NCLT expressed difference of opinion on the issue as a result of which, reference was made to the President of NCLT to place the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... till the final decision i.e. 4-6-2019 i.e. the date the matter was finally decided by the Third Hon'ble Member (total 260 days), can be excluded for the purpose of counting the 270 days. However, as the matter is pending since long, we are not inclined to exclude the total period of 260 days and instead in the interest of the allottees, we exclude 90 days for the purpose of counting the period of 270 days of corporate insolvency resolution process , which should be counted from the date of receipt of the copy of this order. 23. The aforesaid period is excluded to enable the resolution professional / committee of creditors to call for fresh resolution plans and to consider them, if so required after negotiations pass appropriate order under sub-section (5) of Section 30 of the I B Code preferably within a period of 45 days. Rest of the period of 45 days margin is given to remove any difficulty and appropriate order as may be passed by the adjudicating authority. The voting share of the allottees should be counted in terms of I B Code as existing on the date of voting/ Regulation and/or in accordance with majority decision of the adjudicating authority. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate to dilate on the issues as urged and instead, proceeded to again exercise the plenary powers under Article 142 of the Constitution of India in order to ensure substantial justice in the cause. In the process, this Court, of course, rejected the suggestions given by a section of homebuyers to keep the entire process outside the dispensation under the Code with reference to the observations already made in the case of Chitra Sharma (supra), but found it justified to modulate a part of such directions, to the extent such modulation would not stand in conflict with the legislative intent and subserve the cause of justice, by providing a window to find out a viable solution. This Court also took note of various amendments brought about to the Code and the CIRP Regulations; and the overall circumstances of the case, where delay in completion of CIRP relating to JIL was attributable to law s delay and neither homebuyers nor other financial creditors were to be blamed for pendency of proceedings before NCLT and before NCLAT. In the peculiar, rather extraordinary, situation obtaining in the matter, this Court considered it appropriate to ensure that an attempt was made for revival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich can be then placed before CoC for its due consideration. 17. In the present case, as aforementioned, there is unanimity amongst all the parties appearing before this Court including the resolution applicant that liquidation of JIL must be eschewed and instead an attempt be made to salvage the situation by finding out some viable arrangement which would subserve the interests of all concerned. 18. In view of the legislative changes referred to above, we are of the considered opinion that we need to and must exercise our plenary powers to make an attempt to revive the corporate debtor (AIL), lest it is exposed to liquidation process under Chapter III of Part II of the I B Code. We are inclined to do so because the project has been implemented in part and out of over 20,000 homebuyers, a substantial number of them have been put in possession and the remaining work is in progress and in some cases at an advanced stage of completion. In this backdrop, it would be in the interest of all concerned to accept a viable plan reflecting the recent legislative changes. 19. Indeed, the third proviso to Section 12(3) predicates time-limit for completion of insolvency reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o its logical end as per the provisions of the I B Code within the extended timeline prescribed in terms of this order. 21.3. We direct that the IRP shall not entertain any expression of interest (improved) resolution plan individually or jointly or in concert with any other person, much less ineligible in terms of Section 29-A of the I B Code. 21.4. These directions are issued in exceptional situation in the facts of the present case and shall not be treated as a precedent. 21.5. This order may not be construed as having answered the questions of law raised in both the appeals, including as recognition of the power of NCLT/NCLAT to issue direction or order not consistent with the statutory timelines and stipulations specified in the I B Code and the Regulations framed thereunder. 30. The passages above-quoted give insight as to what had been the concern of all and what had been the intent of the orders passed by this Court in its plenary powers. It is not far to seek that even where CIRP in relation to JIL had been facing one hurdle after another, the principal part of delay was not attributable to any of the stakeholders; and then, all through, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation concerning this CIRP, leading to the judgment dated 26.02.2020 in the case of Anuj Jain (supra), came up in the following circumstances: 33.1. As already noticed, even during the pendency of proceedings in this Court in the case of Chitra Sharma (supra), the IRP had filed an application on 06.02.2018 seeking avoidance of certain transactions, whereby the corporate debtor had mortgaged several parcels of its land as collateral security for the loans and advances made by the lender banks and financial institutions to the holding company JAL. The IRP alleged that the transactions in question were preferential, undervalued and fraudulent, in terms of Sections 43, 45 and 66 of the Code. By its order dated 16.05.2018, the NCLT accepted the application so made by IRP in relation to six out of seven transactions that were put in question and held that those transactions were to be avoided as being fraudulent, preferential and undervalued. In other words, in relation to such six transactions, the security interest was ordered to be discharged and the properties involved therein were vested in the corporate debtor, with release of encumbrances. In appeal, the NCLAT, however, took an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for purposive interpretation so as to ensure that the provision operates in sync with the intention of legislature; and therefore, the expression or , appearing as disjunctive between the expressions corporate debtor and transferee , ought to be read as and ; so as to be conjunctive of the two expressions i.e., corporate debtor and transferee . Having interpreted the provision so, this Court held that the impugned transactions did not fall within the ordinary course of business of the corporate debtor JIL and hence, were not of excepted transfers in terms of Section 43(3) of the Code. Accordingly, this Court held as under: - Summation: The transactions in question are hit by Section 43 IBC 30. For what has been discussed hereinabove, we are clearly of the view that the transactions in question are hit by Section 43 of the Code and the adjudicating authority, having rightly held so, had been justified in issuing necessary directions in terms of Section 44 of the Code in relation to the transactions concerning Properties Nos. 1 to 6. NCLAT, in our view, had not been right in interfering with the well-considered and justified order passed by NCLT in this regard. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strength of the mortgages in question, may fall in the category of secured creditors, but such mortgages being neither towards any loan, facility or advance to the corporate debtor nor towards protecting any facility or security of the corporate debtor, it cannot be said that the corporate debtor owes them any financial debt within the meaning of Section 5(8) of the Code; and hence, such lenders of JAL do not fall in the category of the financial creditors of the corporate debtor JIL. 35. It would be relevant to notice that the parcels of land forming the subject of seven questioned transactions were admeasuring about 858 acres; and while leaving 100 acres of land forming the subject of seventh transaction, which was not declared as preferential, a chunk of 758 acres of land, which earlier carried encumbrances because of the mortgages in favour of the lenders of JAL, got released with the judgement delivered by this Court and stood vested in JIL free from encumbrances. The judgement was delivered by this Court on 26.02.2020, after voting by CoC on the resolution plan in question but before the impugned order of NCLT dated 03.03.2020. 36. The foregoing narrative in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the order dated 06.11.2019 passed by this Court, the IRP filed the application bearing C.A. No. 5 of 2020 in C.P. (IB) No. 77/ALD/2017 seeking approval of the resolution plan of NBCC under Section 30(6) read with Section 31 of the Code before the Allahabad Bench of NCLT on 20.12.2019. Later on, the Principal Bench of NCLT at New Delhi transferred the proceeding to itself and that is how the impugned order dated 03.03.2020 came to be passed by the Adjudicating Authority (NCLT, New Delhi) within the time allowed by this Court. 39. For its very nature and for various requirements of the provisions contained in the Code as also in the CIRP Regulations, the resolution plan in question is a vast document carrying business plans, financial proposals including that of treatment of creditors, equity commitment, projected steps and expected reliefs and concessions. We shall refer to the particular stipulation/s in this plan at the relevant stage while dealing with the specific issue related therewith. However, an overview of the resolution plan shall be apposite to take note of its concept and salient features. In this regard, we may usefully reproduce the summary of resolution plan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Refund Seekers (Allottees and customers) 64 (Principal amount) The entire admitted claim of the Refund Seekers shall be settled by payment of an amount not exceeding INR 62.40 Cr, of which 20% shall be paid upfront and the remaining amount shall be paid equally over a period of 4 years i.e. 20% each year in the manner provided under the Resolution Plan. The Total Operational Debt of 464 Crore is proposed to be settled by payment of INR 20 Cr. This includes Claim of Yamuna Expressway Industrial Development Authority (YEIDA) towards development charges, etc. Claim of YEIDA for approx. INR 6000 Crore has not been admitted by IRP since these pertain to future obligations for maintenance of toll road (which have not become due) and sub-judice matters relating to additional farmer compensation. 5. Operational Operational Creditors 464 The Total Operational Debt of 464 Crore is proposed to be settled by payment of INR 20 Cr. This includes Claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges, 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 exclusively for construction of houses. - JAL to pay amount due to JIL (approx. INR 500) (INR 716 Crores on insolvency commencement date) to JIL. 39.3. The key reliefs sought for by NBCC in the resolution plan are summarised as under: - Sl. No. Matter Key Reliefs sought 1. INR 750 Crore (along with interest) deposited by Jaiprakash Associates Ltd. (JAL), holding company of JIL with the Hon ble Supreme Court in Writ Petition (Civil) No. 744/2017. NBCC has retained the right to withdraw its Resolution Plan in case INR 750 Cr along with interest accrued thereon is not made available to JIL. 2. Enforcement Directorate has initiated investigation under the Prevention of Money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, 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 date and no Claim/claim shall lie against JIL or NBCC. 9. Extension of Concession Period To ensure feasibility and viability of this Resolution Plan, YEIDA and other concerned authorities shall extend the concession period (currently 36 years) under the Concession Agreement for an additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. book value of the Yamuna Expressway in the books of the Corporate Debtor (less) INR 2,200 Cr (less) transferred/novated debt) Expressway SPV to avail indebtedness in consultation with the CoC aggregating 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction of their Claims As per the Delivery Schedule set out in Annexure A. 14. Payment of an amount not exceeding INR 62.40 Cr to the Refund Seekers towards their admitted claims 20% of INR 62.40 Cr. within 90 days of the Approval Date, remaining amount to be paid shall be paid equally over a period of 4 years i.e. 20% each year in the manner provided under this Plan 15. Redemption of remaining amount of INR 200 Cr by the Expressway SPV to the Corporate Debtor Any time prior to the monetization of the Expressway Asset by the Institutional Financial Creditors. 40. As noticed, on this resolution plan being presented for approval before the Adjudicating Authority, various objections were raised by various stakeholders. All such objections and the prayer for approval of the resolution plan were considered 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im orders and final judgment in Chitra Sharma. The NCLT also took note of the directions of this Court in the judgment dated 06.11.2019 in the case of Jaiprakash Associates Ltd. and in the judgment dated 26.02.2020 in the case of Anuj Jain. 43. In the second part, in relation to the said amount of INR 750 crores and accrued interest thereupon, the NCLT took note of a vast variety of submissions made by different claimants, which may also be usefully recounted as follows. 43.1. It was submitted on behalf of JAL, who moved an application seeking return of the said sum of INR 750 crores, that when the Supreme Court had declined the request of homebuyers for pro rata distribution of the said amount and had transferred the same to NCLT, the amount could not be appropriated for any purpose other than refunding it to JAL. It was submitted that the said deposit of INR 750 crores had acquired the character of constructive trust and this amount was required to be refunded to JAL 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 mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to be used for the purpose of the refund seekers. It was further submitted that the corporate debtor was generating revenue through collection from Yamuna Expressway but this money, rather than being utilised for servicing the loans provided by the institutional lenders, was being utilised towards construction work and for running the corporate debtor as a going concern; and in this scenario, the said amount of INR 750 crores with interest should be distributed on pro rata basis to the lenders of JIL in accordance with the voting share in the CoC. Along with others, IRP also made submissions that there were 32,754 allottees to whom flats were sold as per the records of JIL and as on 05.10.2018, 24,296 of them were waiting for possession of their flats; and if the money was ordered to be released for construction and development of the projects of the corporate debtor, it would provide a boost to the construction activity and serve the larger purpose. It was submitted by 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 inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Supreme Court. The NCLT, accordingly, disposed of all the applications with respect to the issue of INR 750 crores and held that this money is to be treated as the asset of the corporate debtor. The relevant passages of the observations and findings of NCLT in regard to this issue could be extracted as under: - 51. On reading the judgments and orders of Hon'ble Supreme Court, it is evident that the Hon'ble Supreme Court is aware of the fact that JAL has deposited the money. It is aware of the fact that JIL money has gone to JAL for construction of the towers to the homebuyers of JIL, it is a fact that promoter-directors of JIL and JAL are one and the same. It is a fact that JIL/JAL failed to deliver flats to the homebuyers of JIL within the timelines given by them. In all the orders of the Hon'ble Supreme Court, it has only been said that JIL/JAL shall deposit ₹ 2000 crore towards the refund of homebuyers money. It has not been treated that money as the money 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. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e homebuyers. As long as debtor is liable to pay money to the creditor, once it has been deposited towards that payment, it can't be stated that money belongs to the debtor. *** *** *** 56. ICICI Bank Counsel has argued that money is fungible, therefore unless money has gone out from JAL for repayment, it can't be said as money deposited by JIL is the money payable to JIL homebuyers. 57. No doubt money is fungible, but obligation to repay is not fungible, therefore when money is deposited or clawed back to repay it to the creditor, the money being fungible and there being an obligation for repayment, it can no more be considered as money owned by the debtor. Though JAL is per se not a debtor to the Homebuyers, when money has come on behalf of the debtor in relation to a debt obligation or for discharge of an obligation, the person deposited it towards that obligation cannot subsequently say that he is the owner of the money, therefore entitled for return of it. 58. If trust concept is examined, 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 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court has consciously retained the money within the custody of it and thereafter transferred this money to NCLT with a direction that the parties shall abide by the directions of NCLT. Had the Hon'ble Supreme Court has felt that it should go back to JAL, the Honourable Supreme Court would have returned it to JAL, but it has not been done. Whenever any payment is made towards any liability, it has to be treated as a payment made towards that liability. It does not matter who paid the money, it matters as to whether it has been paid towards an obligation or not. Since JAL has without any objection or condition paid to the homebuyers of JIL on behalf of JIL, it has to be treated that the payment is towards the obligation of JIL. Though it has not been explicitly explained that JAL paid on behalf of JIL, the matter pending before the Hon'ble Supreme Court being with regard to homebuyers of JIL, when money was asked to be deposited towards refund of JIL homebuyers, and the same being paid by JAL, now it is not open to JAL to say that it is JAL s money. 63. As to the argument saying that for ₹ 750 Crore has not gone into the books of Corporate Debtor (JIL), therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not under further obligation to complete construction of homes, there is no occasion to assume that if this money go back to JAL, it would be utilized for the cause of the creditors of the Corporate Debtor, in view thereof, we hereby dispose of all CAs related to ₹ 750 Crore issue by holding that this money is to be treated as the asset of the Corporate Debtor. 44. After having dealt with the issue of INR 750 crores, the NCLT took up the issue with regard to the approval of the resolution plan and for that matter, in the third segment of the impugned order, summarised the salient features of the resolution plan, which have already been noticed hereinbefore and need not be repeated. The objections dealt with by the NCLT in the fourth segment of its order dated 03.03.2020 could now be noticed with reference to the objector and the subject matter. 45. It was submitted on behalf of JAL that the resolution plan could not be approved for the reasons that it was being used as a device for enrichment of NBCC at the cost of the corporate debtor 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 resolu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utilized for the cause of the creditors of the Corporate Debtor and with regard to PMLA proceedings, for Section 32A being brought into existence by way of Amendment to the Code 28.12.2019, now there need not be any separate protection from the PMLA proceedings over the assets of the Corporate Debtor, therefore we have not dealt with this issue, therefore the argument saying that plan is conditional has no merit. *** *** *** 72. Moreover, the calculation of figures given by JAL to say that figures placed by the Resolution Plan are not supported by material, in any event, this being an issue to be taken up by the CoC, this Bench cannot decide the fate of the resolution plan on the figures shown by the promoters of JIL and JAL, unless such plan is vitiated by fraud. 73. Apart from this, it is not the case of promoter/directors that company has positive net worth entitling the promoters of the company to receive the residual proceeds in the event company is liquidated. As long as liabilities are more than the assets of the company, the promoters/directors arguments cannot be seen as a point having bearing on the resolution plan approved by the CoC. 74 .This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP Regulations but in the resolution plan, it was sought to be provided only the land and equity in the SPVs proposed to be incorporated; and such a provision in the resolution plan was entirely impermissible. It was also submitted that while the assenting financial creditors were allowed to receive upfront payment of INR 300 crores on the basis of fresh debts raised by Expressway but the same benefit was not being extended to the dissenting financial creditors. The NCLT noted the star argument of the learned counsel for ICICI Bank that distribution of equity or the land parcels to the dissenting financial creditors does not satisfy the requirement of payment under Section 30(2) of the Code read with Regulation 38(1)(b) of the CIRP Regulations; and such payment has to be a liquidated sum, as stated under Section 53 of the Code. Per contra, it was contended on behalf of the resolution applicant and the IRP that it was nowhere envisaged in Section 30(2) of the Code that payment of liquidation value to dissenting financial creditors has to be in cash; that even Regulation 38(1)(b) of the CIRP Regulations only provided for the priority of payment to the dissenting financial creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the instant case, the obligation was repayment of money lent along with interest. It was observed, that the dissenting financial creditors were to be paid in cash not just by virtue of Section 53 of the Code but also by virtue of the terms and conditions of the agreement between JIL and the dissenting financial creditor, in the following words: - 92 .Therefore this argument will not be ticking to say that payment in kind to the promise is discharge of obligation. If the promisee has agreed to give up the payment obligation, he is free to do so. In this case, for the dissenting financial creditor has not agreed to the approval of the resolution plan, they shall be paid in cash, not only by virtue of the mandate under Section 53 of the Code but also by virtue of terms and conditions of the agreement between the Corporate Debtor and the dissenting financial creditor. 46.3. The NCLT further observed that upon approval of the plan by the CoC, it was not open to the parties to say that, since the assenting creditors were not getting better treatment than the dissenting creditor, the dissenting creditor shall remain bound to the plan; and when a particular issue was governe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 30(2) compliance has been accomplished or not, the RP or the resolution plan applicant cannot say that plan approval is within the ambit of commercial wisdom of the CoC therefore what all that is decided by the CoC is binding upon the dissenting financial creditors. Whenever such compliance is not present in the plan, this Bench is authorised to examine the same and interfere with the plan despite the plan has been approved as contemplated under Section 30(4) of the code. 101. Looking at the resolution plan treatment to the dissenting financial creditor in the light of the aforesaid legal proposition, since it has not been said in the Code that plan should be approved as submitted by the resolution professional under Section 30(6) of the code, we are of the view that this Bench has jurisdiction to approve the plan by modifying the plan to the extent that does not alter the basic structure of the plan. (underlining is in original) 46.4. Having thus held on the requirements of modification of the plan in relation to the treatment of the dissenting financial creditor while retaining its basic structure, the NCLT observed that the two aspects which were made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion, of additional compensation of the land acquired, cropped up with the directions of the Allahabad High Court; and that the liability in regard to the additional compensation in relation to the land acquired and leased to JIL was that of the corporate debtor JIL. It was also pointed out that the question of such additional compensation by JIL was subjected to arbitration proceedings where an award was made to the effect that the corporate debtor need not pay this amount of additional compensation but the award has been questioned by YEIDA in the proceedings under Section 34 of the Arbitration and Conciliation Act, 1996- Hereinafter also referred as to the Arbitration Act - It appears from the corrigendum dated 17.03.2020 and the submissions of the parties that the issue is pending before the Court of District Judge, Gautam Budh Nagar . YEIDA stated its objection to the stipulation in the resolution plan that in case of the award being overruled, YEIDA would collect the amount of additional compensation from the end-users of the project land. It was submitted in this regard that in the CA, two payment components were present - one being of acquisition cost payable by the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution plan stating that the additional compensation would be collected from the end-users; and proceeded to modulate the terms of the resolution plan to read that YEIDA shall have the right to collect the acquisition cost through the SPVs concerned. As regards the issue as to whether additional compensation need not be paid with regard to the Expressway for the same would revert to YEIDA after 36 years, the NCLT found it appropriate to read down the resolution plan as leaving it open to the parties to have proper recourse over this issue in the competent forum when occasion so arise. The NCLT also observed that the Concession Agreement was based on the statute created by the State Government and, therefore, any violation of terms and conditions of the same would be the violation of law in force. The NCLT, however, again recorded the submissions on behalf of YEIDA that their endeavour was only for compliance of the terms and conditions of CA in order to ensure proper monitoring on realisation of dues and supervision over the work of corporate debtors or SPVs but not for rejection of the resolution plan. The relevant observations, findings and directions of YEIDA in regard to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sionaire having proposed to transfer its rights and obligations to the aforesaid two SPVs, we are of the view that documents shall be executed between the concessionaire, YEIDA and each of the SPVs. At last we must say that the concession Agreement is based on the statute created by the State Government, therefore any violation of the terms and conditions of the concession agreement is violation of the law in force as contemplated under section 30(2) of the Code, it has been decided as above. 124. Despite YEIDA counsel representing the State Government Authorities with regard to its rights, the counsel has categorically mentioned that YEIDA s endeavour is only for compliance of the terms and conditions of concession agreement so that the State Agencies will have proper monitoring on realization of its dues and will have proper supervision over the works of the Corporate Debtor or its SPVs, but not to ensure that this resolution plan is rejected by this Bench on the grounds aforementioned. 48. After having dealt with the aforesaid major issues relating to INR 750 crores, objections of JAL and its stakeholders, ICICI Bank and YEIDA, the NCLT proceeded to deal with the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ass of creditors represented by an authorized representative, the approval given to the authorized representative for more than 50% will become 100% approval, therefore it cannot be said that dissenting homebuyers before authorised representative to be considered as dissenting financial creditors against the total voting of CoC. If the authorized representative dissented in the CoC, then the respective class of creditors would be considered as dissenting financial creditors. Moreover, if at all any dissenting financial creditor is there, his only look out is as to whether he has been paid as per Section 30(2) of the Code or not but not to see whether the Resolution Plan is workable or not. 48.3. As regards the objections raised by YES Bank, which had given loan to Jaiprakash Healthcare Ltd., a wholly-owned subsidiary of JIL, against dealing with the shares of its borrower (JHL) in the resolution plan, the NCLT observed that the resolution applicant and the said Bank having agreed for constitution of a Committee to deal with the shares and assets of JHL, that issue was not required to be discussed. The NCLT said, - 127. YES Bank, which has given loan to Jaiprakash Health ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the order of this Court dated 26.02.2020. as part of the resolution plan and pointed out that such an objection lost its relevance after the decision of this Court dated 26.02.2020 in the case of Anuj Jain (supra). 49. Having thus dealt with the relevant objections, the NCLT entered into the fifth segment of its order and generally dealt with the provisions relating to the reliefs and concessions with the observations/directions as under: - 134. The clauses already covered in the aforesaid discussion will not be discussed again, but as to the clauses not covered above are hereby dealt with as follow: - Clauses 1 to 5 have already been covered in the above discussion. Clause No. 6:- With regard to the past liabilities of income tax authority, they shall stand extinguished. Clause No. 7:- Since reduction of the share capital of the corporate debtor is not part of this resolution, this Adjudicating Authority cannot waive the procedure for reduction of share capital in relation to the companies not yet incorporated. Clause No. 8 10:- Payment of stamp duty mentioned in clause 8 is waived to the extent permissible under law. Clause No. 9:- An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immediately succeeding quarter in which the resolution applicant completes the takeover of the CD. Clause No. 23:- This point is not clear as to whether it is referring to the land of the Corporate Debtor mortgaged to the lenders of JAL, if that is so, since it has been decided by the Honourable Supreme Court, it need not be reiterated. Clause No. 24:- This generalization of cancellation of all agreements cannot be granted unless each transaction is specifically dealt with. Clause No. 25:- The resolution applicant cannot modify the resolution plan once it is approved by the CoC. Clause No. 26:- As to the claims placed before the IRP and other liabilities of the CD which are shown in the records of the company and where notice has been given to such creditors, they can be construed as withdrawn after the approval date. Clause No. 27:- With regard to extension of concession period by YEIDA, it is YEIDA to decide as to whether such extension should be given or not. Clause No. 28:- This Adjudicating Authority can only direct the Central Government and Reserve Bank of India to accord permissions to the extent permissible under law. 50. As regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious stakeholders have various submissions to make and various objections to take against the order so passed by the Adjudicating Authority. 52. Having taken note of the relevant contents of the order dated 03.03.2020, as passed by the Adjudicating Authority (NCLT) in exercise of its jurisdiction under Section 31 of the Code, it would be worthwhile to summarise the significant attributes of, and takeaways from, this order because a substantial part of the forthcoming discussion shall be revolving around the findings recorded and directions given therein. The relevant aspects could be summarised as follows: (a) As regards the said sum of INR 750 crores, the Adjudicating Authority, with reference to the orders passed by this Court in the case of Chitra Sharma (supra), held that the deposit made by JAL became an asset of the corporate debtor JIL; and the said money was to be utilised towards securing the interests of homebuyers. As regards the question of the amount payable by JAL to JIL, it was directed that JAL shall make payment of the admitted amount of INR 274 crores; and after reconciliation of accounts, further payment shall be made to whomsoever outstanding was found pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not even required to be said that such agreement could be cancelled by the party concerned. However, the Adjudicating Authority also observed that even when such a clause had been mentioned in the resolution plan, the agreement holders had not lost their right to seek remedy in the competent forum. (h) The Adjudicating Authority generally dealt with the clauses relating to the reliefs and concessions in Schedule 3 of the resolution plan as also various other applications filed by different stakeholders. Some of the reliefs and concessions sought for by the resolution applicant were not granted or were declined, for the reasons specified against the relevant clauses. The other applications/objections were disposed of with a few comments. Order dated 22.04.2020 by NCLAT making interim arrangement 53. As noticed at the outset, the aforesaid order dated 03.03.2020 was challenged in various appeals before the Appellate Authority (NCLAT), which have since been withdrawn to this Court after we took note of all the factors concerning this litigation and accepted the requests made by the parties concerned. Such requests were made when the matters first appeared before us i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent Nos.2 and 3. Requisites along with process fee be filed within three days. If the Appellant provides email addresses of the Respondents, let service be effected through email also. Mr. Sumant Batra, learned Counsel representing the Resolution Professional intends to file an Appeal in regard to some observations made in paragraph 103 of the impugned order. We are told that the implementation of the Successful Resolution Plan would involve participation of the Successful Resolution Applicant , i.e. NBCC (India) Ltd. as also the three major Institutional Financial Creditors, who are Members of the Committee of Creditors i.e., IDBI Bank Ltd., IIFCL and LIC. Meanwhile, till further orders, the approved Resolution Plan may be implemented subject to outcome of this Appeal. The Interim Resolution Professional may constitute Interim Monitoring Committee comprising of the Successful Resolution Applicant , i.e., the Appellant and the three major Institutional Financial Creditors, who were Members of the Committee of Creditors as named above. Mr. Sumant Batra, learned Counsel submits that as of now he is continuing and managing the affairs of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment or performance of an obligation and includes mortgage, charge, hypothecation, assignment and encumbrance or any other agreement or arrangement securing payment or performance of any obligation of any person: Provided that security interest shall not include a performance guarantee; 56.2. The relevant definitions occurring in Section 5 for the purpose of Part II of the Code are as under: - Section 5(1): Adjudicating Authority , for the purposes of this Part, means National Company Law Tribunal constituted under section 408 of the Companies Act, 2013 (18 of 2013); Section 5(7): financial creditor means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to; Section 5(8): financial debt means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 5(26): resolution plan means a plan proposed by resolution applicant for insolvency resolution of the corporate debtor as a going concern in accordance with Part II Inserted by Act 26 of 2019, sec. 2 (w.e.f. 16.08.2019) [Explanation.- For removal of doubts, it is hereby clarified that a resolution plan may include provisions for the restructuring of the corporate debtor, including by way of merger, amalgamation and demerger;] Section 5(27): resolution professional , for the purposes of this Part, means an insolvency professional appointed to conduct the corporate insolvency resolution process and includes an interim resolution professional; and Section 5(28): voting share means the share of 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 financial creditor in relation to the financial debt owed by the corporate debtor. 57. As already indicated, and which is not far to seek, the Explanation inserted to sub-clause (f) of clause (8) of Section 5 with effect from 06.06.2018 made it clear that any amount raised from an allottee under a real estate project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the authorised representative of the financial creditors; Section 30 on the essentials of a resolution plan and its submission to the Committee of Creditors by the resolution professional; Section 31 relating to the approval of resolution plan by the Adjudicating Authority; Sections 32 and 61 relating to the appeal against an order approving the resolution plan and grounds for such an appeal; Section 53 relating to distribution of assets in case of liquidation; and Section 238 on the overriding effect of the Code. These provisions read as under: - Section 18. Duties of interim resolution professional.- The interim resolution professional shall perform the following duties, namely:- (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to- (i) business operations for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial debts issued as securities under sub-section (6). (8) All decisions of the committee of creditors shall be taken by a vote of not less than seventy-five 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 comprise of such persons to exercise such functions in such manner as may be specified by the Board. Section 21. Committee of creditors.-(1) The interim resolution professional shall after collation of all claims received against the corporate debtor and determination of the financial position of the corporate debtor, constitute a committee of creditors. (2) The committee of creditors shall comprise all financial creditors of the corporate debtor: Provided that a financial creditor or the authorised representative of the financial creditor referred to in sub-section (6) or sub-section (6A) or sub-section (5) of section 24, if it is a related party of the corporate debtor, shall not have any right of representation, participation or voting in a meeting of the committee of creditors. Provided further that the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee or agent shall act on behalf of such financial creditors; (b) is owed to a class of creditors exceeding the number as may be specified, other than the creditors covered under clause (a) or sub-section (6), the interim resolution professional shall make an application to the Adjudicating Authority along with the list of all financial creditors, containing the name of an insolvency professional, other than the interim resolution professional, to act as their authorised representative who shall be appointed by the Adjudicating Authority prior to the first meeting of the committee of creditors; (c) is represented by a guardian, executor or administrator, such person shall act as authorised representative on behalf of such financial creditors, and such authorised representative under clause (a) or clause (b) or clause (c) shall attend the meetings of the committee of creditors, and vote on behalf of each financial creditor to the extent of his voting share. (6B) The remuneration payable to the authorised representative- (i) under clauses (a) and (c) of sub-section (6A), if any, shall be as per the terms of the financial debt or the relevant documentation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h director, partner or representative of operational creditors, as the case may be, shall not invalidate proceedings of such meeting. (5) Subject to sub-sections (6), (6A) and (6B) of section 21, any creditor who is a member of the committee of creditors may appoint an insolvency professional other than the resolution professional to represent such creditor in a meeting of the committee of creditors: Provided that the fees payable to such insolvency professional representing any individual creditor will be borne by such creditor. (6) Each creditor shall vote in accordance with the voting share assigned to him based on the financial debts owed to such creditor. (7) The resolution professional shall determine the voting share to be assigned to each creditor in the manner specified by the Board. (8) The meetings of the committee of creditors shall be conducted in such manner as may be specified. Section 25. Duties of resolution professional.-(1) It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the corporate debtor. (2) For the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the committee of creditors to the financial creditor he represents. (3) The authorised representative shall not act against the interest of the financial creditor he represents and shall always act in accordance with their prior instructions: Provided that if the authorised representative represents several financial creditors, then he shall cast his vote in respect of each financial creditor in accordance with instructions received from each financial creditor, to the extent of his voting share: Provided further that if any financial creditor does not give prior instructions through physical or electronic means, the authorised representative shall abstain from voting on behalf of such creditor. (3A) Notwithstanding anything to the contrary contained in subsection (3), the authorised representative under sub-section (6A) of section 21 shall cast his vote on behalf of all the financial creditors he represents in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents, who have cast their vote: Provided that for a vote to be cast in respect of an application under section 12A, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; or (ii) the amount that would have been paid to such creditors, if the amount to be distributed under the resolution plan had been distributed in accordance with the order of priority in sub-section (1) of section 53, whichever is higher, and provides for the payment of debts of financial creditors, who do not vote in favour of the resolution plan, in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with sub-section (1) of section 53 in the event of a liquidation of the corporate debtor. Explanation 1.-For the removal of doubts, it is hereby clarified that a distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors. Explanation 2.-For the purposes of this clause, it is hereby declared that on and from the date of commencement of the Insolvency and Bankruptcy Code (Amendment) Act, 2019, the provisions of this clause shall also apply to the corporate insolvency resolution process of a corporate debtor- (i) where a resolution plan has not been approved or rejected by the Adjudicating Authority; (ii) where an appeal has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2017), where the resolution applicant is ineligible under section 29A and may require the resolution professional to invite a fresh resolution plan where no other resolution plan is available with it: Provided further that where the resolution applicant referred to in the first proviso is ineligible under clause (c) of section 29A, the resolution applicant shall be allowed by the committee of creditors such period, not exceeding thirty days, to make payment of overdue amounts in accordance with the proviso to clause (c) of section 29A: Provided also that nothing in the second proviso shall be construed as extension of period for the purposes of the proviso to sub-section (3) of section 12, and the corporate insolvency resolution process shall be completed within the period specified in that sub-section.] Inserted by Act 26 of 2018, sec. 23(iii)(b) (w.r.e.f. 06.06.2018) [Provided also that the eligibility criteria in section 29A as amended by the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018 (Ord. 6 of 2018) shall apply to the resolution applicant who has not submitted resolution plan as on the date of commencement of the Insolvency and Bankruptcy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (w.r.e.f. 06.06.2018) [(4) The resolution applicant shall, pursuant to the resolution plan approved under sub-section (1), obtain the necessary approval required under any law for the time being in force within a period of one year from the date of approval of the resolution plan by the Adjudicating Authority under sub-section (1) or within such period as provided for in such law, whichever is later: Provided that where the resolution plan contains a provision for combination as referred to in section 5 of the Competition Act, 2002 (12 of 2003), the resolution applicant shall obtain the approval of the Competition Commission of India under that Act prior to the approval of such resolution plan by the committee of creditors.] Section 32. Appeal.-Any appeal from an order approving the resolution plan shall be in the manner and on the grounds laid down in sub-section (3) of section 61. Section 61. Appeals and Appellate Authority.-(1) Notwithstanding anything to the contrary contained under the Companies Act, 2013 (18 of 2013), any person aggrieved by the order of the Adjudicating Authority under this part may prefer an appeal to the National Company Law Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing dues shall rank equally between and among the following:- (i) any amount due to the Central Government and the State Government including the amount to be received on account of the Consolidated Fund of India and the Consolidated Fund of a State, if any, in respect of the whole or any part of the period of two years preceding the liquidation commencement date; (ii) debts owed to a secured creditor for any amount unpaid following the enforcement of security interest; (f) any remaining debts and dues; (g) preference shareholders, if any; and (h) equity shareholders or partners, as the case may be. (2) Any contractual arrangements between recipients under subsection (1) with equal ranking, if disrupting the order of priority under that sub-section shall be disregarded by the liquidator. (3) The fees payable to the liquidator shall be deducted proportionately from the proceeds payable to each class of recipients under sub-section (1), and the proceeds to the relevant recipient shall be distributed after such deduction. Explanation. For the purpose of this section- (i) it is hereby clarified that at each stage of the distrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interim resolution professional or the resolution professional, as the case may be, shall provide electronic means of communication between the authorised representative and the creditors in the class. (7) The voting share of a creditor in a class shall be in proportion to the financial debt which includes an interest at the rate of eight per cent per annum unless a different rate has been agreed to between the parties. (8) The authorised representative of creditors in a class shall be entitled to receive fee for every meeting of the committee attended by him in the following manner, namely:- Number of creditors in the class Fee per meeting of thecommittee (Rs.) 10-100 15,000 101-1000 20,000 More than 1000 25,000 (9) The authorised representative shall circulate the agenda to creditors in a class and announce the voting window at least twenty-four hours before the window opens for voting instructions and keep the voting window open for at least twelve hours. This Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n priority in payment over financial creditors. [(1) The amount payable under a resolution plan- (a) to the operational creditors shall be paid in priority over financial creditors; and (b) to the financial creditors, who have a right to vote under subsection (2) of Section 21 and did not vote in favour of the resolution plan, shall be paid in priority over financial creditors who voted in favour of the plan.] (1A) A resolution plan shall include a statement as to how it has dealt with the interests of all stakeholders, including financial creditors and operational creditors, of the corporate debtor. (1B) A resolution plan shall include a statement giving details if the resolution applicant or any of its related parties has failed to implement or contributed to the failure of implementation of any other resolution plan approved by the Adjudicating Authority at any time in the past. (2) A resolution plan shall provide: (a) the term of the plan and its implementation schedule; (b) the management and control of the business of the corporate debtor during its term; and (c) adequate means for supervising its implementation. 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attract penal action under the Code. (1A) A resolution plan which does not comply with the provisions of sub-regulation (1) shall be rejected.] Sub-regulation (2) was substituted w.e.f. 07.11.2017. Prior to this substitution, this subregulation (2) stood as under: (2) The resolution professional shall present all resolution plans that meet the requirements of the Code and these Regulations to the committee for its consideration. [(2) The resolution professional shall submit to the committee all resolution plans which comply with the requirements of the Code and regulations made thereunder along with the details of following transactions, if any, observed, found or determined by him- (a) preferential transactions under section 43; (b) undervalued transactions under section 45; (c) extortionate credit transactions under section 50; and (d) fraudulent transactions under section 66, and the orders, if any, of the adjudicating authority in respect of such transactions.] This sub-regulation (3) was substituted w.e.f. 04.07.2018; before its substitution it stood as under: (3) The committee may approve any resolution plan with such modi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n plan approved by the committee to the Adjudicating Authority at least fifteen days before the maximum period for completion of corporate insolvency resolution process under section 12, along with a compliance certificate in Form H of the Schedule and the evidence of receipt of performance security required under sub-regulation (4A) of regulation 36B.] (5) The resolution professional shall forthwith send a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and the resolution applicant. (6) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the constitutional documents of the corporate debtor, shareholders agreement, joint venture agreement or other document of a similar nature, shall take effect notwithstanding that such consent has not been obtained. (7) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (8) A person in charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate debtor JIL carries with it vexed and strikingly intricate issues where twice over this Court had exercised its plenary powers under Article 142 of the Constitution of India to ensure complete justice in the cause and yet, for a variety of reasons, the insolvency resolution is eluding the corporate debtor JIL; and even when the resolution plan is said to have been approved by a vast majority of 97.36% of the voting share of Committee of Creditors, several issues are still hovering over with an assortment of grievances of different stakeholders and role players. Even the very process taken up by the Committee of Creditors has been questioned apart from several questions over one or the other stipulation in the resolution plan. Further, several questions have spurt up on the order passed by the Adjudicating Authority, wherein some of the objections have been accepted and the plan has been modified while a few other objections have been rejected. Modification of the resolution plan by the Adjudicating Authority has given the resolution applicant and even IRP several causes to be discontented with and at the same time, rejection of some of the objections has also been challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.12.2019, either the Sub-Lease Deed is still to be executed or the Sub-Lease Deed is pending for registration before the Registrar of Assurances of Noida. I state that the delivery of units and their transfer by way of sublease registration has resulted in a reduction of Financial Creditors (Real-Estate Allottees) liability by more than ₹ 2,250 Crores since commencement of the CIR Process in the Corporate Debtor. The objectives and scheme of IBC 63. For dealing with the questions involved, worthwhile it would be to begin the discussion broadly on the scheme of the Code and assignments of some of the relevant role players in the corporate insolvency resolution process. 63.1. As noticed from the Preamble, the Code came to be enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner; the objectives, inter alia, being for maximisation of the value of assets of such persons and balance of interests of all the stakeholders. The Preamble reads as under: - An Act to consolidate and amend the laws relating to reorganisation and insolvency re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme-workers are paid, the creditors in the long run will be repaid in full, and shareholders/investors are able to maximise their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern. (See ArcelorMittal Arcelor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission and approval of the resolution plan; and the appeal against approval of the resolution plan. Approval of resolution plan: Crucial steps and role players 65. As noticed, as per the requirements of the Code read with the orders passed by this Court in the cases of Chitra Sharma and Jaiprakash Associates Ltd. (supra), the insolvency resolution process in relation to the corporate debtor JIL has already passed through the stages of initiation, appointment of interim resolution professional, constitution and reconstitution of the Committee of Creditors, submission and resubmission of resolution plans, approval of the resolution plan of NBCC by the Committee of Creditors, submission of the said resolution plan to the Adjudicating Authority, and its approval by the Adjudicating Authority, albeit with some modifications. 65.1. The issues now raised before us basically relate to the contents of the resolution plan in question; its approval by the Committee of Creditors; and the order passed by the Adjudicating Authority in its approval with modifications. Thus, on the issues raised and points arising for determination, the focus in the present case is on the dispensa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 15, 17, 18 and 20 of the Code. Further, in the scheme of IBC, the Committee of Creditors, in its first meeting to be held within seven days of its constitution, has to resolve to appoint the interim resolution professional as a resolution professional or to replace him by another resolution professional (vide Section 22 IBC). In terms of Section 23, the resolution professional is to conduct the entire CIRP and manage the operations of the corporate debtor during the period of CIRP. His duties and responsibilities extend to the conduct of all the meetings of the Committee of Creditors, giving notice of such meetings to the members of CoC, to the members of the suspended Board of Directors and to the operational creditors, if amount of their aggregate dues is not less than 10% of the debt. Akin to the duties of the interim resolution professional under Section 18 of the Code, the resolution professional is also required to preserve and protect the assets of the corporate debtor while continuing with the business operations and while undertaking the actions contemplated by Section 25(2) of the Code. Significantly, the resolution professional is also required to prepare the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same form as presented to it or in a modified form; and as to whether the attempt for revival of corporate debtor be made or not, ultimately rests with the pivotal body, comprising of the financial creditors of the corporate debtor and termed as Committee of Creditors . As noticed from the provisions above-quoted, the final decision on a resolution plan is taken by the Committee of Creditors; and, for approval, a resolution plan is required to be voted in favour by not less than 66% of the voting share of the financial creditors, as per Section 30(4) of the Code. It is also relevant to point out that though the resolution professional is to run the business of the corporate debtor as a going concern during the corporate insolvency resolution process but, as per Section 28(3) of the Code, he cannot take certain decisions relating to the management of the corporate debtor without prior approval of the Committee of Creditors by a vote of at least 66% of the voting shares- This percentage of minimum votes of CoC, for approval of resolution plan as also for prior approval of certain actions, was seventy-five in the Code as originally enacted and was altered to sixty-six by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the debt due from the defaulting companies. In the new approach, there is a calm period followed by a swift resolution process to be completed within 270 days (outer limit) failing which, initiation of liquidation process has been made inevitable and mandatory. In the earlier regime, the corporate debtor could indefinitely continue to enjoy the protection given under Section 22 of the Sick Industrial Companies Act, 1985 or under other such enactments which has now been forsaken. Besides, the commercial wisdom of CoC has been given paramount status without any judicial intervention, for ensuring completion of the stated processes within the timelines prescribed by the I B Code. There is an intrinsic assumption that financial creditors are fully informed about the viability of the corporate debtor and feasibility of the proposed resolution plan. They act on the basis of thorough examination of the proposed resolution plan and assessment made by their team of experts. The opinion on the subject-matter expressed by them after due deliberations in CoC meetings through voting, as per voting shares, is a collective business decision. The legislature, consciously, has not provided any gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the IRP *** 4. Creation of the creditors committee The creditors committee will have the power to decide the final solution by majority vote in the negotiations. The majority vote requires more than or equal to 75 per cent of the creditors committee by weight of the total financial liabilities. The majority vote will also involve a cram down option on any dissenting creditors once the majority vote is obtained. The Committee deliberated on who should be on the creditors committee, given the power of the creditors committee to ultimately keep the entity as a going concern or liquidate it. The Committee reasoned that members of the creditors committee have to be creditors both with the capability to assess viability, as well as to be willing to modify terms of existing liabilities in negotiations. Typically, operational creditors are neither able to decide on matters regarding the insolvency of the entity, nor willing to take the risk of postponing payments for better future prospects for the entity. The Committee conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 applicant to the effect that such dues ought to be paid in full, so that the carrying on of the business of the corporate debtor does not become impossible for want of a most basic and essential element for the carrying on of such business, namely, electricity. This may, in turn, be accepted by the resolution applicant with a consequent modification as to distribution of funds, payment being provided to a certain type of operational creditor, namely, the electricity distribution company, out of upfront payment offered by the proposed resolution applicant which may also result in a consequent reduction of amounts payable to other financial and operational creditors. What is important is that it is the commercial wisdom of this majority of creditors which is to determine, through negotiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place. (emphasis in bold supplied) 67.5. In the case of Maharashtra Seamless Ltd. (supra), again, a 3- Judge Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egally 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 in the aforesaid decisions, as shall be noticed infra. 70. With the foregoing observations and while keeping the aforementioned enunciations in view, we may now take up the points arising for determination in this case. Point A Contours of the jurisdiction of Adjudicating Authority in dealing with a resolution plan 71. As noticed, the resolution plan in relation to the corporate debtor JIL, as propounded by NBCC, has been approved by the Committee of Creditors with the votes of 97.36% of the voting share of financial creditors. However, the Adjudicating Authority (NCLT), while passing the impugned order dated 03.03.2020, has modified some of the terms of the resolution plan while also declining modification in relation to some other terms of the resolution plan. In relation to either of the events, whether of modifying the terms of the plan or declining the prayer for modification, invariably the question pertaining to the jurisdiction of the Adjudicating Authority would arise for considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The NCLT, by its order dated 20.11.2017, allowed the petition so filed and approved the resolution plan with certain directions. The three dissenting financial creditors, including the said Bank of Maharashtra, filed an appeal before NCLAT against the order of NCLT in approving the resolution plan despite the same having not received the approval of minimum 75% votes of the voting share of financial creditors. The Managing Director of the corporate debtor also filed an appeal challenging the observation made by NCLT regarding the corporate guarantee to be proceeded with. 73.2. The factual aspects relating to the other corporate debtor IIL had been that its lender bank filed insolvency application that was admitted by NCLT, Mumbai on 17.01.2017. In the CoC meeting relating to this corporate debtor, the financial creditors holding 66.57% voting share voted in favour of approving the proposed resolution plan, whereas dissenting financial creditors, having 33.43% voting share, voted again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 retrospective in operation nor was having retroactive effect. The Court also rejected the suggestion for different percentage of voting share in the case of KSPIPL. These aspects are not much relevant for the present purpose. The aspects relevant are the enunciations in relation to the respective roles of the Committee of Creditors and the Adjudicating Authority. As already noticed, this Court explained in detail the primacy given to the commercial wisdom of the Committee of Creditors and such commercial wisdom being made non-justiciable. Having said so, this Court also proceeded to define the strict limits of the jurisdiction of NCLT/NCLAT while dealing with the matter relating to approval of resolution plan in the following passages: - 55. Whereas, the discretion of the adjudicating authority (NCLT) is circumscribed by Section 31 limited to scrutiny of the resolution plan as approved by the requisite per cent of voting share of financial creditors. Even in that enquiry, the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or not approved by a vote of not less than 75% of voting share of the financial creditors. Indubitably, the remedy of appeal including the width of jurisdiction of the appellate authority and the grounds of appeal, is a creature of statute. The provisions investing jurisdiction and authority in NCLT or NCLAT as noticed earlier, have not made the commercial decision exercised by CoC of not approving the resolution plan or rejecting the same, justiciable. This position is reinforced from the limited grounds specified for instituting an appeal that too against an order approving a resolution plan under Section 31. First, that the approved resolution plan is in contravention of the provisions of any law for the time being in force. Second, there has been material irregularity in exercise of powers by the resolution professional during the corporate insolvency resolution period. Third, the debts owed to operational creditors have not been provided for in the resolution plan in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution 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 operational creditors. The order so passed by the NCLAT was in challenge before this Court. 74.2. In the given backdrop, the roles of resolution professional, resolution applicant and Committee of Creditors as also the jurisdiction of Adjudicating Authority and Appellate Authority came up for further and fuller exposition by this Court in Essar Steel (supra). We have already noticed the passages from this decision in regard to the scheme of IBC and the pivotal role of Committee of Creditors in the process of insolvency resolution of a corporate debtor. As regards the jurisdiction of Adjudicating Authority and Appellate Authority in this process of insolvency resolution, in Essar Steel, this Court extensively referred to the principles laid down and explained in K. Sashidhar and thereafter held as under: - Thus, it is clear that the limited judicial review available, which can in no circumstance trespass upon a business decision of the majority of the Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble 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 assets; and that the interests of all stakeholders including operational creditors has been taken care of. If the Adjudicating Authority finds, on a given set of facts, that the aforesaid parameters have not been kept in view, it may send a resolution plan back to the Committee of Creditors to re-submit such plan after satisfying the aforesaid parameters. The reasons given by the Committee of Creditors while approving a resolution plan may thus be looked at by the Adjudicating Authority only from this point of view, and once it is satisfied that the Committee of Creditors has paid attention to these key features, it must then pass the resolution plan, other things being equal. (emphasis in bold supplied) 74.4. Thereafter, this Court dealt with the matter on merits in relation to certain claims and objections which need not be elaborated; suffice it would be to notice that this Court did not approve the impugned order of NCLAT and directed that CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 plan on the basis of quantitative analysis. While disapproving interference by the Appellate Authority, this Court observed and held as under: - 27. Now the question arises as to whether, while approving a resolution plan, the adjudicating authority could reassess a resolution plan approved by the Committee of Creditors, even if the same otherwise complies with the requirement of Section 31 of the Code. The learned counsel appearing for Indian Bank and the said erstwhile promoter of the corporate debtor have emphasised that there could be no reason to release property valued at ₹ 597.54 crores to MSL for ₹ 477 crores. The learned counsel appearing for these two respondents have sought to strengthen their submission on this point referring to the other resolution applicant whose bid was for ₹ 490 crores which is more than that of the appellant MSL. 28. No provision in the Code or Regulations has been brought to ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 put, in regard to the insolvency resolution, the decision as to whether a particular resolution plan is to be accepted or not is ultimately in the hands of the Committee of Creditors; and even in such a decision making process, a resolution plan cannot be taken as approved if the same is not approved by votes of at least 66% of the voting share of financial creditors. Thus, broadly put, a resolution plan is approved only when the collective commercial wisdom of the financial creditors, having at least 2/3rd majority of voting share in the Committee of Creditors, stands in its favour. 77. In the scheme of IBC, where approval of resolution plan is exclusively in the domain of the commercial wisdom of CoC, the scope of judicial review is correspondingly circumscribed by the provisions contained in Section 31 as regards approval of the Adjudicating Authority and in Section 32 read with Section 61 as regards the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfying 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 of any debt or asset is essentially required to be left to the collective commercial wisdom of the financial creditors. 77.4. During the course of submissions, one of the parties (YEIDA), seeking to support modification of the resolution plan concerning some of the terms and stipulations, has referred to a decision by a learned Single Judge of the Allahabad High Court in the case of Pradumna Kumar Jain v. U.P. Secondary Education Service Commission, Allahabad and Ors.: (1997) 30 ALR 339 to submit that the power to approve or disapprove includes the power to modify; and it has been strongly argued that the power to modify is inherent in the power of approval in terms of Section 31 of the Code. It is noticed that the questions involved in the cited decision related to the powers under Regulation 8 of the U.P. Secondary Education Services Commission (Procedure for Approval of Punishment) Regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the net worth of JIL being much higher. 77.6.1. The assessment about maximisation of the value of assets, in the scheme of the Code, would always be subjective in nature and the question, as to whether a particular resolution plan and its propositions are leading to maximisation of value of assets or not, would be the matter of enquiry and assessment of the Committee of Creditors alone. When the Committee of Creditors takes the decision in its commercial wisdom and by the requisite majority; and there is no valid reason in law to question the decision so taken by the Committee of Creditors, the adjudicatory process, whether by the Adjudicating Authority or the Appellate Authority, cannot enter into any quantitative analysis to adjudge as to whether the prescription of the resolution plan results in maximisation of the value of assets or not. The generalised submissions and objections made in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solution 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), permitting the CoC to put more than one resolution plan to vote, was inserted to CIRP Regulations only with effect from 07.08.2020 and being prospective in operation, would not apply to the present process. Per contra, it is contended by the parties standing with the approval of the plan in question that there had not been any prohibition or restriction in the Code for putting more than one resolution plan to vote at the same time. On behalf of IRP, it has also been contended that in terms of subsection (3) of Section 30, he was required to present the CoC such resolution plans, which were conforming to the conditions referred in subsection (2); and as per sub-section (4) of Section 30, the CoC may approve a resolution plan . It is, therefore, submitted that in the present process, both the plans were rightly placed before the CoC; and the CoC rightly voted on such plans and appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced 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 about 2.3%. Due deliberations in this regard, in the meeting of Committee of Creditors dated 07.12.2019, read as under: - The IRP enquired from CoC about the Resolution Plan that need to be put for voting by CoC. IDBI Bank on behalf of lenders proposed that given the unique nature of this case both plans should be put to vote as this will provide equal opportunity for individual members of COC to select their preferred Resolution Plan. The main reason for proposing joint vote on both plans was - -Specific directions of Hon ble Supreme Court under its special powers (Article 142) where COC/IRP was required to consider Resolution Plans from only NBCC and Suraksha in accordance with law and regulation. -Ideally it would like to propose the H1 Resolution Plan to vote, but since the total overall evaluation scores were very close and there is no consensus amongs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6% 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 giving our imprimatur to such a process. The baseless objection in this regard has rightly been rejected by the Adjudicating Authority. Point C Matters related with the land providing agency YEIDA 86. We may now enter into the first major point for determination in this batch of matters; and that relates to the stipulations in the resolution plan concerning the land providing agency YEIDA. The frontal aspect of this issue is about the provision made in the resolution plan for meeting with the contingent liability of additional compensation for land acquisition. The other aspect pertains to the directions by the Adjudicating Authority for execution of tripartite agreement amongst YEIDA, the corporate debtor JIL and the SPVs proposed to be set up in terms of the resolution plan. An ancillary aspect relates to certain reliefs and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 there can be subsequent multiple sub-leases of the land in smaller parts. The lease rent of the respective sub-leased portion of land shall be paid by the sub-lessees / transferees to TEA directly on pro-rata basis @ ₹ 100.00 (Rupees one hundred) per hectare per year. The Concessionaire shall be required to pay lease rent to TEA for the portion of land remaining in its possession after sublease, on pro-rata basis at the aforesaid prescribed rate. Total lease rent paid by the Concessionaire and various sublessees / transferees shall be ₹ 100.00 (Rupees one hundred) per hectare per year. *** *** *** g. The Concessionaire may make a request to TEA to execute the lease deed directly in favour of Concessionaire s subsidiaries, assigns, transferees etc. in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the said committee recommended for grant of additional compensation (to the extent of 64.7%) to the land owners whose land had been acquired. While accepting these recommendations, the Government of U.P. proceeded to issue G.O. dated 29.08.2014, directing YEIDA to ensure payment of additional compensation to all the land owners. In this turn of events, YEIDA demanded the amount of additional compensation from JIL to the tune of INR 2591.78 crores by its communication dated 20.01.2015 and yet another amount of approximately INR 247 crores by its communication dated 31.05.2017. 88.1. The aforesaid communications of YEIDA and the said G.O. dated 29.08.2014 were challenged by JIL by way of a writ petition before the High Court of Allahabad but, later on, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensation 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 YEIDA, who will get the ultimate ownership of the Yamuna Expressway after the expiry of the concession period under the Concession Agreement and accordingly the compensation in this regard shall be payable by YEIDA. 90. Apart from the above, the resolution applicant also proposed to set up two separate SPVs, one being Expressway SPV and another being Land Bank SPV. It was proposed that the assets and liabilities pertaining to Expressway shall be transferred to the Expressway SPV by way of transfer of 100% shareholding and the concession rights under the CA; and that out of the unutilised parcels of land available with the corporate debtor, 1,526 acres shall be transferred to Land Bank SPV; and that Land Bank SPV will also take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Clause reads as under: - 27. To ensure feasibility and viability of this Resolution Plan, YEIDA and other concerned authorities shall extend the concession period (currently 36 years) under the Concession Agreement for an additional period of ten years. 92. YEIDA took exception to several parts of the stipulations aforesaid before the Adjudicating Authority and essentially submitted that the liability towards the amount of additional compensation, in relation to the land acquired and leased to JIL, was that of JIL, although such a question was sub judice in challenge to the arbitral award under Section 34 of the Arbitration Act. It was submitted on behalf of YEIDA that in case the liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority 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. Interestingly, the other reliefs and concessions in regard to YEIDA, as sought for in the aforementioned Clauses 14 and 27, were specifically declined by the Adjudicating Authority (vide the comments on these clauses in paragraph 134 of the order dated 03.03.2020). However, as regards Clause 4 of the reliefs and concessions that YEIDA shall withdraw the arbitration case filed under Section 34 of the Arbitration Act, though the Adjudicating Authority noticed this aspect in the arguments of the parties but, did not make any specific order in that regard and in paragraph 134 of the impugned order dated 03.03.2020, merely observed that Clauses 1 to 5 were covered by the previous discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 statutory contract. This issue relating to contingent liability of additional compensation, according to NBCC, is required to be settled for proper implementation of the resolution plan or else, it may lead to serious impediment in future. 95.2. As regards those observations of the Adjudicating Authority where the issue of additional compensation qua the Expressway land has been left open for decision in the competent forum, it is submitted that the observations are not in accord with the decision in Essar Steel (supra), that there ought to be finality of claims against the corporate debtor. According to YEIDA, if this issue is left to be decided in any other proceedings, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 individual homebuyers standing in support of the plan have contended that the alleged terms of the Concession Agreement and any alleged breach thereof does not amount to a breach under Section 30(2)(e) of the Code and therefore, the Adjudicating Authority has acted wholly without jurisdiction in dealing with such terms because they do not come within the scope of Section 31 of the Code. 97.1. However, one of the homebuyers, who has moved an application for intervention, I.A. No. 84309 of 2020, has made several submissions questioning the dealings of JIL and YEIDA and has submitted that the Concession Agreement having not been provided to the homebuyers, the CIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 of the corporate debtor. 99.4. As regards the land falling under Expressway, YEIDA has questioned the contentions urged on behalf of NBCC and it is submitted that such a ground was not taken in the appeal filed against the impugned order and was raised for the first time in written submissions. Nevertheless, according to YEIDA, the argument is patently incorrect, for it ignores the fact that the corporate debtor JIL and its successor SPVs would derive the benefits of both, the toll collected from Expressway for 36 years as also from the other land for development. It has also been submitted that the additional compensation for Expressway, when to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred 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 argued that the provisions of the Code cannot override a public body s right and duty to control and regulate as to how its properties are to be dealt with. 99.9. As regards the powers of the Adjudicating Authority to modify the plan, reliance is placed on the decision in ArcelorMittal (supra), where this Court has held that the Adjudicating Authority is to apply judicial mind to a resolution plan to satisfy itself that the plan meets the requirements under Section 30 of the Code. It is further submitted that even in Essar Steel (supra), this Court has recognised the Adjudicating Authority s power of judicial review. Further, with reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyers 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 with the rival submissions, we may indicate at the outset that some of the objections like questioning the dealings of JIL and YEIDA and want of availability of CA with the homebuyers have unnecessarily been raised and carry no meaning to the real questions in controversy. They require no discussion and are left at that. 102. Coming to the real questions in controversy, in the first place, we deem it appropriate to observe that the suggestion on behalf of YEIDA and erstwhile director of the corporate debtor, that the Concession Agreement in question is a statutory contract, is not correct and cannot be accepted. It has rightly be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 escrow accounts that obligation cannot be regarded as statutory. (emphasis in bold supplied) 102.1. Applying the principles aforesaid to the facts of the present case, we are clearly of the view that the agreement in question does not acquire the status of a statutory contract merely for having been executed in terms of the powers with YEIDA under Section 6-A of the U.P. Act of 1976. 102.2. Apart from above, another part of the submissions on behalf of YEIDA with reference to the case of Nand Kishore Gupta (supra) against incorporation of two SPVs cannot be accepted. The observations of this Court in the case of Nan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 created as an SPV. However, it would be wholly unrealistic to say that once JIL was created as an SPV, the said Clause 18.1 stood exhausted and there remained no obligation on the part of JIL (as the substituted concessionaire) to execute the necessary documents if it would propose to transfer its rights and obligations under the CA to another SPV; and it could do so without the consent of YEIDA. This suggestion carries an inherent fallacy because if Clause 18.1 is removed from the CA, a serious question would arise as to how the rights and obligations of the substituted concessionaire JIL could at all be transferred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.4. 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 stipulations in the resolution plan whereby documentation for such transfer was sought to be avoided, proceeded to order execution of such documents. According to YEIDA, this modification has no commercial effect and therefore, has rightly been ordered by NCLT. Although this modification, prima facie, does not appear to be having any commercial effect, for it being only a matter of proper documentation but, interlaced with this process of documentation are the other stipulations, which do impact the commercial terms of the resolution plan, particularly those relating to the amount of additional compensation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 there will not be any liability of the concessionaire or its assigns towards the land under Expressway. 106.1. It appears that while proposing to create two different SPVs, the resolution applicant stumbled on an idea that the liability for additional compensation as regards Expressway land could be simply deflected to YEIDA with reference to the fact that YEIDA will get this land back after 36 years; and reflected this idea by way of the questioned proposition in the resolution plan. The Adjudicating Authority has chosen to leave this issue open, for being litigated at the appropriate time and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 public authority, YEIDA, who had envisaged and promoted the entire project, would, in future dealing with the matter, act with caution and circumspection, while earnestly reflecting upon the practical impact of its propositions/decisions on various stakeholders, including the homebuyers. 109. For what has been discussed hereinabove, we are constrained to hold that the stipulations in the resolution plan, as regards dealings with YEIDA and with the terms of Concession Agreement, have rightly not been approved and the stipulations in question, when not being consented to by YEIDA, are requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the Corporate Debtor and subsequent reduction of share capital to extinguish the shareholding of Institutional Financial Creditors in the Corporate Debtor in entirety; Transfer of 100% shareholding of Land Bank SPV from the Corporate Debtor to the Institutional Financial Creditors; Transfer of 100% shareholding of Expressway SPV from the Corporate Debtor to the Institutional Financial Creditors for a consideration equal to their then outstanding debt to be paid by way of settlement of the outstanding debt to the same extent; and I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Creditors as stipulated above there will be a corresponding decrease in the equity and area of land parcels being transferred to the Institutional Financial Creditors (through the Land SPV) who vote in favour of the Plan. Further the Resolution Applicant shall have the sole discretion to determine the location of the land parcels to be transferred to the Dissenting Financial Creditors and the value of such land parcels being transferred shall be same as that proposed under this Resolution Plan for the Institutional Financial Credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 disapproving, the Adjudicating Authority proceeded on the lines that this objectionable part of the resolution plan could be modified without altering the basic structure of the plan. Having said so, the Adjudicating Authority proceeded to modify the resolution plan in the manner that the resolution applicant shall pay to the dissenting financial creditors the amount, that was receivable in terms of Section 53 of the Code, in twelve monthly instalments together with interest with other stipulations, as contained in parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 challenge to the directions in paragraph 103 of the order of the Adjudicating Authority while defending the terms and stipulations in the resolution plan. It is submitted that Step 6B in the resolution plan has been formulated in due compliance of the requirements of Section 30(2) of the Code and Regulation 38(1) of the CIRP Regulations. It is stated in its written submissions that the requirements of law are duly satisfied as follows: 3. Thus, the requirements of law have been met in the following mann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 resolution, a resolution plan may provide for various ways of settlement of claims. On the scheme of the Code and object and purpose of resolution, the decisions in ArcelorMittal and Swiss Ribbons (supra) have been referred. Regulation 37(1) of the CIRP Regulations has also been referred wherein it is provided that a resolution plan may provide for securities in exchange of claims. It is also submitted that limiting the word payment only to mean cash would defeat the purpose of resolution and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 of the resolution plan; and if the other institutional financial creditors also wanted to receive their money, they would have simply voted for liquidation which would have deprived thousands of homebuyers of any chance of getting their homes. It is also submitted that if cash payment is considered to be the only mode of payment available to the dissenting financial creditors, it would incentivise the financial creditors to go for dissent, leading to more liquidations and fewer re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay 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 485. 114.4. It is further submitted that in the resolution plan, the treatment of the dissenting financial creditors is inferior to the assenting financial creditors inasmuch as the latter is being provided an upfront payment of INR 300 crores, whereas the former is not provided with any cash at all. Such treatment defeats the purpose of Section 30(2)(b) of the Code, which has been amended to protect the interests of the dissenting financial creditors. 114.5. Yet furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 intention of the Bank would be the liquidation of the corporate debtor. Such contention of NBCC furthers its mala fide intentions and is placed only to undermine the dissentient bank. 115. The submissions so made on behalf of the dissenting financial creditor bank have also been supported by the erstwhile director of the corporate debtor JIL and JAL. It is submitted that the proposition in the resolution plan to satisfy the claim of the dissenting financial credito ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitutionality 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 experimentation in things economic is a grave responsibility, and denial of the right to experiment is fraught with serious consequences to the nation. We have also seen that the working of the Code is being monitored by the Central Government by Expert Committees that have been set up in this behalf. Amendments have been made in the short period in which the Code has operated, both the code itself as well as to subordinate legislation made under it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 provisions of the Insolvency and Bankruptcy Code. The Insolvency and Bankruptcy Code (Amendment) Bill, 2019, inter alia, provides for the following, namely:- (a) to amend clause (26) of section 5 of the Code so as to insert an Explanation in the definition of resolution plan to clarify that a resolution plan proposing the insolvency resolution of corporate debtor as a going concern may include the provisions for corpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate 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 authorities; (g) to amend sub-section (2) of section 33 of the Code to clarify that the committee of creditors may take the decision to liquidate the corporate debtor, in accordance with the requirements provided in sub-section (2) of section 33, any time after the constitution of the committee of creditors under sub-section (1) of section 21 until the confirmation of the resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment 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 inserted in order that the Adjudicating Authority and the Appellate Tribunal cannot enter into the merits of a business decision of the requisite majority of the Committee of Creditors. As has also been held in this judgment, there is no residual equity jurisdiction in the Adjudicating Authority or the Appellate Tribunal to interfere in the merits of a business decision taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the decisions cited by the learned counsel for the contesting parties are not of much debate and hence, we need not elaborate on every cited decision. The contextual interpretation remains one of the fundamental guiding principles; and the relevant observations in paragraph 54 of the decision in Sankalchand Himatlal Sheth (supra), which have been referred to by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 interpretation which is equally well settled and which seems to follow as a necessary corollary, namely, where the words, according to their literal meaning produce an inconsistency, or an absurdity or inconvenience so great as to convince the Court that the intention could not have been to use them in their ordinary signification , the Court would be justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 priority. This provision, read with Regulation 38(1), makes it clear that the next priority is of operational creditors who are followed by the dissenting financial creditors. The question is as to what is intended by these provisions and as to how the action of payment is to be performed? 120.2. The referred observations in the case of Pioneer Ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge 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 amount . The word amount in its noun form is defined in Webster s Third New International Dictionary (at page 72) in the parlance of accounting as under: - 3 accounting: a principal sum and the interest on it 121. Taking up the provisions under debate, it is but clear that as per sub-section (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king 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 clarified to avoid any ambiguity, that the security interest referred herein for the purpose of money recovery by dissenting financial creditor would only be such security interest which is relatable to the financial debt and not to any other debt or claim . In any case, that is, whether by direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 refer to financial creditors as such and it would be too far stretched to say that these expressions may have different meanings for different financial creditors in the manner that a financial creditor who could accept payment by any mode other than money could be paid by that mode and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 refers to the payment of money and not anything of its equivalent in the nature of barter; and a provision in that regard is required to be made in the resolution plan whether in terms of direct money or in terms of money recovery with enforcement of security interest, of course, in acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 other area of suggestions and disputes concerning the particular parcels of land being offered by the resolution applicant to the objector bank. These aspects are rendered redundant once we have held that the payment envisaged by Section 30(2)(b) read with Section 53 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 made under sections 13 and 15 . CIRP Regulations make the position clearer still, where, by virtue of Regulation 12, a creditor is required to submit his claim with proof on or before the last date mentioned in the public announcement ; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 justification for the directions contained in paragraph 125 of the order passed by NCLT. Those directions are required to be annulled. Point F Objections of the financial creditor of subsidiary of the corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such settlement was drawn out with NBCC and the Adjudicating Authority has failed to consider the objections on rather incorrect assumptions. It is submitted that the resolution plan interferes with the statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king 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 effective sale process. (iv) JHL lenders shall liaise with the IRP, Mr. Jain and share the status of the steps periodically with IRP and NBCC. (v) A Sale Committee to bet set up with p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so 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 by NBCC. Thus, according to NBCC, there has been an agreement between the parties on the manner of sale to be carried out of JHL shares. This apart, NBCC has also refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 were found valid during the CIRP by the CoC and they cannot become improper agreements overnight on the mere saying of the resolution applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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-promoter shareholders have invested their hard-earned money in the equity of the corporate debtor much before initiation of CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 protected but the Adjudicating Authority has not even considered the matter relating to the interests of the minority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty 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 53 of IBC) and the exit price being paid to the promoters. In this regard, the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution process. It goes without saying that in the case of a corporate debtor like JIL, if the process of liquidation is resorted to under Chapter 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate debtor, the homebuyers got their say in the Committee of Creditors. In fact, such an amendment and inclusion of homebuyers in the Committee of Creditors had far-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 envisag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e may summarise the substance thereof, while avoiding prolixity, as far as possible. 159.1. It is contended on behalf of the association of homebuyers, who has filed the appeal (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that the resolution plan in question, being a conditional one in terms of Clauses 1 and 2 of Schedule 3 thereof, could not have been taken as a resolution plan standing 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. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no clause for refund of money in a situation that the construction is not completed within time; and cent percent approval has not been given for effectuating the resolution plan. The grievance 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity of homebuyers had written to him indicating NBCC as the preferred choice. It is submitted that both these statements on behalf of the homebuyers were grossly incorrect and contrary to record and as 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 oug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plan only talks about the date of completion of the construction of flats but does not indicate the completion date of the entire project of Jaypee Greens Aman ; and as construction of flats of this project is carried 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 standstil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thousand homebuyers and thereby, the voting weightage by about 10%. The applicant has further submitted that the present one is an exceptional case requiring innovative approach and has even suggested the alternative that 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these homebuyers without demonstrating the manner in which any provision under RERA is being violated; and that the resolution plan, at no instance, states that it would not comply with the applicable laws. However, it is submitted 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate debtor in terms of Section 31 of the Code once it is approved; and therefore, the said association is estopped from challenging, or seeking an exit from, the resolution plan as the plan stands approved. In regard to the submission that 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- -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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme of the Code in relation to a plan of insolvency resolution, we are clearly of the view that the propositions of some of the associations and individual homebuyers to claim themselves as dissenting homebuyers and thereby, dissenting financial 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- -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 proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these amendments as also their meaning, connotation and effect. The relevant part of the matter, in regard to the issue at hand, is that along with the aforesaid amendment, this Court also examined the amendment of Section 25A with insertion of 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 Rib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire class of the financial creditor/s he represents. 164.5. To put it in more clear terms qua the homebuyers, the operation of sub-section (3A) of Section 25A of the Code is that their authorised representative is required to vote on the resolution plan 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 dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05% in terms of the voting share. They have to sail along with the overwhelming majority. That is the purport and effect of drag along or sail along provisions in the scheme of the Code. 166. For what has been discussed hereinabove, the suggestions that there 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 ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CoC even if the relationship of creditor and debtor subsists between him and the corporate debtor. 170. To sum up this part of discussion, in our view, after approval of the resolution plan of NBCC by CoC, where homebuyers as a class assented to the plan, any individual homebuyer or association cannot maintain any challenge to the resolution plan nor could be treated as carrying any legal grievance. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place by replacing the management of the corporate debtor by means of a resolution plan which must be accepted by 66% of the Committee of Creditors, which is now put at the helm of affairs, in deciding the fate of the corporate debtor. Such resolution plan then puts the same or another management 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. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) needs no discussion because that would not apply to the issues presently under consideration. 172. Yet another objection as regards liquidation costs has rightly been clarified by the IRP and NBCC that under Regulation 39B of the CIRP Regulations, the CoC has been given a discretion to 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 separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of the provisions of the Real Estate (Regulation and Development) Act, 2016 does not arise; the resolution plan in question is not violative of the mandatory requirements of the CIRP Regulations; and when the resolution plan comprehensively deals with all the assets and liabilities of the corporate 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 mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain invested and parties shall bide by such directions as may be issued by the Adjudicating Authority. This amount of INR 750 Cr along with the interest accrued thereon will be made available to the Corporate Debtor/Resolution Applicant. Post receipt by the Corporate Debtor, this amount of INR 750 Cr will be treated in 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to the proceedings in the case of Chitra Sharma, it is submitted that the purpose for which this deposit was ordered has been achieved due to the amendment of IBC and there is no reason for allowing this amount to be treated as an asset of JIL. It is also submitted that in Chitra Sharma, this Court directed opening of the webportals 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 31.03.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to be refunded. This amount may be verified by the RP or by a chartered accountant appointed by him. 29. However, it is pertinent to mention herein that NBCC s Resolution Plan treats the contracts for construction (between JIL and JAL) in the following manner [@Pg.47of JAL s Additional Affidavit dated 12.05.2020]: (vi) Resolution Applicant shall have a right to terminate 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 ₹ 195 Crores (which was to be appropriated towards the construction of J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to JAL so as to secure the interests of its homebuyers. 178.3. An association of homebuyers of JAL has also challenged the said order of NCLT dated 03.03.2020 directly in this Court and has submitted that Knights Court Project was supposed to be completed by 2015 and the homebuyers have already paid 95% of the sale consideration to JAL. It is submitted that the sum of INR 750 crores was deposited by 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrued interest to JAL, have been duly countered by the persons/entities standing for the resolution plan, while supporting the order passed by the Adjudicating Authority. We may take note of the leading submissions in this regard. 179.1. It has been contended on behalf of the resolution applicant NBCC that the resolution plan introduced by it, which got approved by the CoC and by the Adjudicating Authority, 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of JAL about its liability towards JIL to the tune of INR 274 crores and ordered that JAL shall make this payment to JIL; and regarding the remaining amount, JAL and JIL shall draft a reconciliation statement and proceed according to the outcome of such reconciliation. 179.1.6. Long drawn submissions have been made on behalf of NBCC in regard to the alleged liabilities of JAL towards JIL on various scores. These aspects 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with JAL lenders. v. From above details, it is apparent that a cash amount of INR 756 Cr (381 + 304 + 71 Cr) is payable by JAL to JIL as on 31.3.2020. vi. It is pertinent to mention that the Hon ble Court by judgment dated 26.02.2020 in Civil Appeal No. 8512-8527 of 2019 Anuj Jain vs. Axis Bank Limited etc. etc. (2020 SCC Online SC 237) ( 758 Acres Judgment ) has set aside mortgage created on 758 acres of land belonging to JIL to secure the 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 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omebuyers have also prayed for an injunction against NBCC, barring it from withdrawing and for direction to NBCC to expedite the process of implementation. Yet further prayers have been made to direct an audit of the quality of construction by NBCC to make sure that it conforms to the quality agreed upon by the homebuyers at the time of booking the apartments. 179.3. The other homebuyers of JIL, while supporting the submissions aforesaid, have reiterated that the directions 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 consc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime, they were not recognised as financial creditors of the corporate debtor. The matter, of course, arose from the insolvency proceedings relating to JIL but the submissions before the Court did not remain limited to the homebuyers of JIL alone; rather the predicaments were placed before the Court on behalf of the homebuyers of JAL and JIL as a whole lot and it was submitted that the interests of the flat purchasers , who had invested with JAL and JIL, need to be protected. On 11.09.2017, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the proposals advanced on behalf of JAL, 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 . Thereafter, the matters were finally heard and decided by way of the judgment dated 09.08.2018. 181.6. Even at the final consideration of the matter, further proposals were mooted on behalf of JAL but were rejected by this Court while explaining that accepting any such proposal 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 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for refund seekers, the homebuyers who were seeking their flats would have a legitimate grievance. Another reason was that the insolvency resolution process qua JAL was also being permitted. This was coupled with the position that this Court was reviving the CIRP in relation to JIL. 181.9. It is also noteworthy that though the homebuyers were earlier not recognised as financial creditors, the doubts about their status as financial creditors were removed with amendment of the statute (IBC) with effect from 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit to JAL by this Court, the NCLT omitted to consider that the directions to JAL by this Court were not backed by any finding that in law JAL was liable to make good the said some of money for the purpose of refund seeker homebuyers of JIL alone. The directions and observations of this Court in the case of Chitra Sharma when read ad seriatim with their context, it is clear that such directions for deposit to JAL were that of an attempt by this Court to deal with the demands of refund seeking homebuyers of JAL and 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 deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble NCLT. (underlining supplied for emphasis) 185.1. Therefore, even though various aspects relating to other assets and their potential utilisation were indicated in the information memorandum but, as regards this sum of INR 750 crores, the information memorandum made it absolutely clear that the same was deposited by JAL and was lying with NCLT; and that its end use was pending decision of NCLT. In the face of such unequivocal expressions, it cannot be accepted that in the information memorandum, any declaration was made that this sum of INR 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of JAL; and stipulation in the resolution plan concerning its usage by the resolution applicant of JIL cannot be approved. The part of the impugned order dated 03.03.2020 placing this amount in the asset pool of JIL is set aside. 189. After we have found that the impugned order dated 03.03.2020 placing the said amount of INR 750 crores and accrued interest in the asset pool of JIL is unsustainable, the question is as to what orders in sequel be made regarding this money? In ordinary circumstances, the consequence of the findings in the preceding paragraphs would have 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within 7 days of receipt of copy of this judgment, nominate an independent accounting expert; and the accounting expert so nominated by NCLT shall carry out the process of reconciliation while involving IRP of JIL and one representative of JAL. Looking to the underlying urgency, the accounting expert shall complete the entire process of reconciliation of accounts and submission of his report to NCLT within 10 days of his nomination. The professional charges and expenses for the task assigned to the accounting expert shall be determined by NCLT and shall be borne equally by JAL and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting this course appears to be in the balance of the legal rights of the respective stakeholders as also in the balance of equities. We would hasten to observe that ordinarily, the equitable considerations do not directly come into play in corporate insolvency resolution process but the matter concerning this amount of INR 750 crores and accrued interest thereupon is a convoluted and stand-alone issue, having the peculiarities of its own and hence, we have adopted the course as contemplated above. This process is otherwise not of determination of the claims of individual stakeholders, be 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t falling within relevant time, as provided in Section 43 of the Code and hence, the same was not avoided. The order so passed by the Adjudicating Authority (NCLT) was, however, reversed by the Appellate Authority (NCLAT). Hence, the matter came in appeal before this Court and was dealt with in the case of Anuj Jain (supra), decided on 26.02.2020. 194. In the judgment dated 26.02.2020 in Anuj Jain (supra), this Court took note of all the relevant particulars of the said seven transactions and the one, which was not found falling within relevant time, was noticed by this Court as follows: - 7.5. Yet another 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 ₹ 1500 crores and overdraft amount of ₹ 175 crores to JAL (hereinafter also refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 34.3, hereinbefore 194.3. The judgment dated 26.02.2020 in the case of Anuj Jain (supra) was delivered by this Court after the voting by CoC on the resolution plan in question but before passing of the impugned order dated 03.03.2020 by the Adjudicating Authority. 195. In the resolution plan, apart from various stipulations in regard to the land of JIL and creation of two SPVs with transfer of certain parcels of land, the resolution applicant stated in Clause 23 of Schedule 3 relating to reliefs and concessions as under: - 23. The JAL Lenders Mortgaged Land shall continue to be vested in the Corporate Debtor free of any 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Adjudicating Authority corrected these errors in the corrigendum dated 17.03.2020 in the manner that the cross-reference is to Clause 23 of Schedule 3 of the resolution plan and the extent of land held by this Court to be of avoidance transactions is 758 acres . 197. To put it in clear terms, the net outcome of the propositions, proceedings and findings noticed in the preceding paragraphs is as follows: 858 acres of JIL s land was mortgaged with the lenders of JAL; in the resolution plan, NBCC sought the relief that such land shall continue to remain vested in the corporate debtor JIL free from any mortgage, charge and encumbrance; 758 acres, out of this 858 acres, of land got released from mortgage in terms of the judgment in Anuj Jain (supra); 100 acres of land, being Tappal Property 1 , however, continued to remain under mortgage with 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd conclusion of this Court in the case of Anuj Jain (supra), that the said bank is not a financial creditor of JIL and hence, has no locus in the matter and cannot claim payment of liquidation value of the debt owed by JAL. Without prejudice, it is also submitted that the resolution plan adequately deals with the treatment of the terms of securities, guarantees, indemnities, pledge, charge or encumbrances of any kind in relation to any debt and in this regard, the prescription in the resolution plan at page 362 of the appeal filed by NBCC has been referred. That part of the resolution plan pertains to the terms/stipulations under the subheading, Effects of Settlement of Admitted Financial debt due to Financial Creditors which in turn, occurs under the heading 1.2. Proposal for Financial Creditors . The referred term provides for release and discharge of 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 ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able reproduced hereinabove where, while making reference to the mortgages in favour of the lenders of JAL, an incorrect cross-reference was made to Clause 1 of Schedule 3 of the resolution plan. This error was also corrected in the order dated 17.03.2020 and correct reference was made to Clause 23 of Schedule 3 but, again, the implication of this correction totally escaped the attention of the Adjudicating Authority. 203.3. As noticed, in the said Clause 23, a fleeting suggestion on the part of the resolution applicant had been that JAL lenders mortgaged land shall continue to be vested in the corporate debtor free from any mortgage, charge and encumbrance . The Adjudicating Authority dealt with the said clause of the resolution plan in an equally cursory manner by observing that the point was not clear but, if it was referring to the land mortgaged with the lenders 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 Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sues requiring clarification/directions 207. In its detailed submissions, NBCC has also raised an issue that in Clause 7 Schedule 3 of the resolution plan, reduction of share capital is being sought for the corporate debtor and not for the companies yet incorporated but the Adjudicating Authority has erroneously made the observations in its order that such reduction was not a part of this resolution. The resolution applicant NBCC has sought clarification in this regard. The relevant clause in the resolution plan reads as under: - 7. The approval of this Plan by the Adjudicating Authority shall be deemed to have waived all the procedural requirements in terms of Section 66, Section 42, Section 62(1), Section 71 of the CA, 2013 and relevant rules made thereunder, in relation to reduction of share capital of the Corporate Debtor, issuance of shares by Expressway SPV, Land Bank SPV, 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 Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding for Interim Monitoring Committee comprising of the representatives of three institutional financial creditors and the resolution applicant as also the resolution professional, was picked up by the Appellate Authority with reference to the stipulation in Point No. 2(a) of Part A of the resolution plan, where it was provided under the heading Management Team and sub-heading Appointment of Monitoring Agency that on and from the approval date and until the transfer date, the corporate debtor will be managed by a monitoring agency or any other person appointed by the resolution applicant in consultation with a Steering Committee comprising of three major institutional financial creditors. 212.1. In our view, even if the resolution plan carried such a management framework, the Appellate Authority, while dealing with the appeal against approval of the resolution plan, could not have provided for such a mechanism 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 (NC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ameters delineated by the Code and exposited by this Court. B. The process of simultaneous voting over two plans for electing one of them cannot be faulted in the present case; and approval of the resolution plan of NBCC is not vitiated because of simultaneous consideration and voting over two resolution plans by the Committee of Creditors. C. The stipulations in the resolution plan, as regards dealings with YEIDA and with the terms of Concession Agreement, have rightly not been approved by the Adjudicating Authority but, for the stipulations which have not been approved, the only correct course for the Adjudicating Authority was to send the plan back to the Committee of Creditors for reconsideration. D. The Adjudicating Authority has not erred in disapproving the proposed treatment of dissenting financial creditor like ICICI Bank Limited in the resolution plan; but has erred in modifying the related terms of the resolution 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 holder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 191.1 of this judgment. The amount, if found receivable by JIL, be made over to JIL and the remaining amount together with accrued interest be refunded to JAL in an appropriate account. It is made clear that the present matter being related to CIRP of JIL, no other orders are passed in relation to the amount that would be refunded to JAL because treatment of the said amount in the asset pool of JAL shall remain subject to such orders as may be passed by the competent authority dealing with the affairs of JAL. K. (i) Clause 23 of Schedule 3 of the resolution plan, providing for extinguishment of security interest of the lenders of JAL could not have been approved by the Adjudicating Authority, particularly in relation to the security interest that has not been discharged. This part of the order dated 03.03.2020 is set aside. (ii) Adequate provision is required to be made in the resolution plan as regards utilisation of the land bank 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs are found in the resolution plan approved by the Committee of Creditors vis- -vis the specified parameters, the plan cannot be approved and the matter is required to be sent back to the Committee of Creditors. But the course to be adopted in the present matter carries its own share of complications. 219. We have anxiously pondered over all the peculiarities and complications involved in this matter where twice over in the past, this Court had to invoke its plenary powers under Article 142 of the Constitution of India, so that the insolvency resolution process concerning JIL could be taken to its logical fruition but within the discipline of IBC. Having regard to the circumstances, this Court had provided windows for completion of CIRP while essentially discounting on the time spent in the course of litigations. 220. As noticed, in the judgment dated 09.08.2018 in Chitra Sharma (supra), this Court revived the CIRP after taking note of the peculiarities 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 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -called correction of errors was carried out by the Adjudicating Authority on 17.03.2020 and the figure was corrected to 758 acres but the consequences of such a material correction were not examined. 221.2. Nevertheless, it gets reiterated that encumbrance over 758 acres of land (which is said to be carrying a valuation of over INR 5000 crores) is removed; and availability of the said land parcel has a substantial impact on the position of assets and liquidity of the corporate debtor JIL. 222. For all the features we have noticed hereinabove, it is at once clear that the entire substratum of the corporate insolvency resolution concerning JIL has undergone a sea of change. The added features in the continuing processes had been that JAL asserts to have carried out several works to reduce its liability towards JIL and on the other hand, IRP has asserted to have carried out further construction works and having made Offers of Possession to several homebuyers. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangements where title and ownership was lying with the corporate debtor JIL. The Adjudicating Authority approved the said proposition while observing that the resolution applicant would be at liberty to proceed in accordance with law. The erstwhile director of the corporate debtor has raised questions over this arrangement in his written submissions while submitting that such terminations may create unprecedented crises and would cause prejudice to JAL s homebuyers. We have not commented on this aspect in the judgment essentially for the reason that the same did not form the core of the principal issues involved in this matter. However, when the matter is to be reconsidered, all the relevant aspects are left open for consideration of the Committee of Creditors. 225. Accordingly, while once again exercising our powers under Article 142 of the Constitution of India to do substantial and complete justice to the parties and in the interest of all the stakeholders 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 pro ..... 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