TMI Blog2022 (12) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... on this ground. Whether the amount under the Resolution Plan can be less than the Liquidation Value ? - HELD THAT:- The Resolution professional in its submissions has said that the liquidation value was strictly according to the regulations of the I B Code, 2016 and were valued by two independent registered valuers. It has also been said that the Resolution Plan amount was approved by Committee of Creditors including, majority of the of the Homebuyers . All apartments forming part of pending projects of the Corporate Debtor had been included and made part of the information memorandum, which was approved by the Committee of Creditors . - no fault can be found in view of judgment of the apex court in the case of Maharashtra Seamless Ltd Vs Padmanabhan Venkatesh Ors. [ 2020 (1) TMI 903 - SUPREME COURT ] and therefore the Adjudicating Authority rightly held that the resolution plan amount need not match the Liquidation value. Whether the 4th Respondent who is Successful Resolution Applicant is close associate of 3rd Respondent who is Financial Creditor of the 1st Respondent (Corporate Debtor) and whether the 4th Respondent as such can be barred by I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Tribunal , has been filed. Several issues have been raised by the Appellant which, inter-alia, include issues regarding fairness of Resolution Plan , the Resolution Plan amount being lower than the Liquidation Value , exorbitant interest charges by the Financial Creditors in their claims, denial of claims of the Appellant etc. 5. The Petitioner /Appellant / Association earlier in IA 576 of 2020 (TA No. 50 of 2021 in Comp. App (AT) (Ins.) No. 215 of 2020), had prayed for condoning the delay of around 15 days, in preferring the Appeal . 6. According to the Petitioner / Appellant / Association , the Certified copy of the impugned order dated 13.12.2019 in MA / 554 / 2019 in CP/193/IB/2018, was communicated to the Appellant on the same day and that the Limitation Period of 30 days for preferring the instant Appeal , expired on 12.01.2020 and hence the instant Appeal , was filed with a minor delay of 15 days. The IA 576 of 2020 (Condone Delay Application), filed by the Applicant / Appellant , was allowed by this Appellate Tribunal , as early as on 12.08.2021. Hence, the main Company Appeal (AT) (Ins.) No. 215 of 2020, is being dealt in following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 30(2)(b) of I B Code, 2016. The Learned Counsel for the Appellant assailed the impugned order dated 13.12.2019 which approved such a Resolution Plan on pretext that additional capital is required for additional construction. 11. The Learned Counsel for the Appellant faulted the conduct of the 2nd Respondent who disallowed large claims of the Homebuyers which were substantiated by consolidated single receipt on the letterhead of the Corporate Debtor and/ or accompanied with the No Dues Certificates . The Learned Counsel for the Appellant stated this denial was done only due to fact that such payments could not be tallied with the Books of Accounts of the Corporate Debtor as maintained in Tally which is not fault of the Appellant . 12. The Learned Counsel for the Appellant mentioned that the 4th Respondent is closely related to the 1st Respondent and in collusion submitted discriminatory Resolution Plan which is prejudicial against the Appellant . The Learned Counsel for the Appellant further mentioned that against various relief sought against the Homebuyers who are members of the association without making them as a party, the Appellant filed the Misc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 1 requested this Appellate Tribunal to reject and dismiss the appeal. 17. The Learned Counsel for the Respondent No. 2 assailed that the accusation of the Appellant wherein it has been alleged that the 2nd Respondent has reduced the shares of the Homebuyers by accepting higher interest rate for financial institution in contrast to the Homebuyers . The Learned Counsel for the Respondent No. 2 further clarified that the interest rates were accepted based on the already existing agreements with the Creditors and where it was not stipulated interest rate was provided @8% in line with the Regulation 16A of the IBBI (Resolution Process for Corporate Person, Regulation 2016). 18. The Learned Counsel for the Respondent No. 2 also countered the Appellant allegations regarding denial of the Appellant s claims and not taking into the account the No Dues Certificate issued by the Corporate Debtor along with cash payment made to the Corporate Debtor . The Learned Counsel for the Respondent No. 2 further assailed that the acceptance of such claims based on No Dues Certificates which apparently had been issued on alleged cash payments were not in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope was discussed and approved in Committee of Creditors and outcomes as drawn was conducted by a professional Chartered Accountants Firm and accepted by the Resolution Professional , which also inter-alia, commented on No Dues Certificates authenticity. 23. The Learned Counsel for the Respondent No. 3 concluded his arguments and stated that the intention of the Appellant is to make unwarranted gains by obtaining flats without making required payments as per Resolution Plan duly approved by the Adjudicating Authority . 24. The Learned Counsel for the Respondent No. 4 pointed out that the decision of the Adjudicating Authority in rejecting the claims of the Appellant which have now again been raised which have already reached finality in view of dismissal of Appellant s appeal before this Appellate Tribunal passed vide order dated 13.12.019 in CA (AT) (Ins.) No. 1444 of 2019 which was not challenged by the Appellant . The Learned Counsel for the Respondent No. 4 further pointed out that this cannot be pleaded now as barred by res judicata. 25. The Learned Counsel for the Respondent No. 4 cited the judgment of the Hon ble Supreme Court of India in Jaypee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sale consideration. (b) Whether the percentage recovery available to members of the association lower than Financial Creditor is permissible. (c) Whether approved Resolution Plan can provide for differential treatments to the different class of Homebuyers by way of charging different premium rates. The challenge of the Appellant with regards to denial of the claims and asking of additional payment for handing over flats are the main issues of this appeal. The I B Code, 2016 and many judgments of Hon ble Supreme Court of India has established that distribution of proceeds of the Resolution Plan is subject to the wisdom of Committee of Creditors and it cannot be challenged, even by way of an appeal. The I B Code, 2016 under Section 30(4), obligates the Committee of Creditors to assess the viability and feasibility of the Resolution Plan. In respect of the same, the Code prescribes for the manner in which the Resolution Plan will be evaluated as per Evaluation Matrix. On the basis of the score of the different resolution applicants, the Committee of Creditors if approves the Resolution Plan by a vote of not less than prescribed perce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in to regulating the manner in which the financial creditors ought to or ought not to exercise their commercial wisdom during the voting on the resolution plan under Section 30(4) of the I B Code. The subjective satisfaction of the financial creditors at the time of voting is bound to be a mixed baggage of variety of factors. To wit, the feasibility and viability of the proposed resolution plan and including their perceptions about the general capability of the resolution applicant to translate the projected plan into a reality. The resolution applicant may have given projections backed by normative data but still in the opinion of the dissenting financial creditors, it would not be free from being speculative. These aspects are completely within the domain of the financial creditors who are called upon to vote on the resolution plan under Section 30(4) of the I B Code. Thereafter, the Hon ble Supreme Court of India reaffirmed this view in Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. Reported in (2020) 8 SCC 531 holding that, it is clear that the scope of judicial review while approving resolution plans was required to be within ambit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Resolution Plan . The contention of the Appellant with regards to equitable treatment with the financial creditor and not being treated at par with them does not seems to hold ground as the Hon ble Supreme Court of India had established in case of Committee of Creditors of Essar Steel India Limited vs. Satish Kumar Gupta and Ors. Hence the challenge to the impugned order on ground that percentage recovery available to members of the association is lower than Financial Creditor is not palatable. Therefore, this Appellate Tribunal do not find any error in the impugned order on this ground. 30. Issue No. (II) Whether the amount under the Resolution Plan can be less than the Liquidation Value ? The apex court in the case of Maharashtra Seamless Ltd Vs Padmanabhan Venkatesh Ors. Reported in (2020) 11 SCC 467. 26. No provision in the code or regulations has been brought to our notice under which the bid of any Resolution Applicant has to match liquidation value arrived at in the manner provided in Clause 35 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.... 27. It appears to us t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ween the 4th Respondent as Successful Resolution Applicant and the 3rd Respondent DMI Finance (P) Limited as the Financial Creditor of the 1st Respondent ( Corporate Debtor ). However, the Respondent has denied that Resolution Applicant is Special Purpose Vehicle of DMI Finance Limited. It has been said that the 4th Respondent had entered into formal financial support arrangement with the 3rd Respondent to fund partly the Resolution Applicant and nowhere does the I B Code, 2016 opposes such relation and this cannot be termed as collusion. This Appellate Tribunal tends to agree to contention of the Respondent on this part, looking to provisions of the I B Code, 2016. Hence, it can be said that as the I B Code, 2016 places no embargo upon a financial creditor from voting upon a Resolution Plan which is fully funded by it or partly funded by the Successful Resolution Applicant . The judgment of the Hon ble Supreme Court of India in Jaypee Kensington Boulevard Apartments Welfare Assn. vs. NBCC (India) Ltd. Reported in (2022) 1 SCC 401 gives following ratio :- The homebuyers as a class shall be deemed to have voted in favour of approval of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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