9911796707
TMI Blog2022 (12) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... rg, M/s. APM Infrastructure Private Limited, M/s. One City Infrastructure Pvt. Ltd. Akila Constructions Pvt. Ltd., S. Sony & Co. Pvt. Ltd. Versus Puma Realtors Pvt. Ltd., One City Infrastructure Pvt. Ltd. Larsen & Toubro Limited Versus Puma Realtors Pvt. Ltd., One City Infrastructure Pvt. Ltd., APM Infrastructure Private Limited Greater Mohali Area Development Authority Versus Puma Realtors Pvt. Ltd., Pawan Kumar Garg Amarjeet Kaur, Balkar Singh, Sharanjeet Kaur Grewal, Gurpreet Singh Grewal, Paramjeet Kaur, Gurusharan Singh Versus Puma Realtors Pvt. Ltd., One City Infrastructure Pvt. Ltd. [ Justice Anant Bijay Singh ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appellants : Mr. Bilal Ali & Mr. Adarsh Kumar Gupta, Advocates. For the Respondents : Mr. Krishnendu Datta, Sr. Advocate with Mr. Adhish Sharma, Mr. Nitin Pandey, Ms. Varsha Himat Singh & Mr. Akash Kattar, Advocates for R-2. Mr. Virendar Ganda, Sr. Advocate with Mr. Vivek Sinha, Mr. Vivek Malik & Ms. Akanksha, Advocates for Axis Finance. Mr. Abhijeet Sinha, Mr. Kushank Sindhu, Ms. Gazal Ghai & Mr. Anmol Singh, Advocates for Erstwhile Resolution Professional. Ms. Akanksha Mathur & Ms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Resolution plan to the IBBI and also to all the concerned Authorities; 4. The Resolution Professional, as well as other Aggrieved Parties, whose Applications are pending on the file of this Adjudicating Authority, are at liberty to prosecute their respective litigations. And this order is passed without prejudice to the rights of the Parties in the pending Interim Applications. 5. No order as to costs." (Emphasis Supplied) 3. Submissions of the Learned Counsel appearing on behalf of the Appellants: Company Appeal (AT) (Insolvency) No.554/2021: * It is submitted by the Appellants in this Appeal that they are a group of Small-Scale Firms who supplied services to the 'Corporate Debtor' which is a Real Estate Company. On 17.10.2018, Corporate Insolvency Resolution Process ('CIRP') was initiated by the Adjudicating Authority and Mr. Pawan Kumar Garg was appointed as the IRP. On 22.10.2018, in accordance with the Public Announcement, the Appellants filed their respective 'Claims' in their capacity of 'Operational Creditors'. It is averred that during the fag end of the CIRP, the Appellants came to know that the Resolution Plan of 'One City Infrastructure Private Limited' has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nounced by some other Member duly authorised under the Rules 151 & 152. * The Resolution Plan was approved under Section 31(1) without disposing of the objections of the Appellants raised under Section 30(2) of the Code. * The Resolution Plan was conditionally approved and therefore the Impugned Order dated 01.06.2021 is non-est and is passed without the jurisdiction. Conditionally approved Plan cannot be said to have a binding effect on the parties. * GMADA cannot be treated as a Creditor of the 'Corporate Debtor' as they did not prefer any claim and only those 'Claims' which are verified by the RP under Regulation 13 of the CIRP Regulations, 2016 and have been put before the CoC under Regulation 17 as part of list of Creditors, will be eligible to be included in the Information Memorandum under Regulation 36(d) of the CIRP Regulations, 2016 and can be used by the Resolution Applicant for the purpose of distributing money under the Resolution Plan. In the absence of any claim made by GMADA, in complete violation of the Regulations, GMADA was given 100% payment under the Plan. * GMADA's charge against the alleged hypothecation of the land of the 'Corporate Debtor' has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter to 17.02.2021. The matter was reserved for Orders along with I.A.2259(PB)/2019 and I.A. No.2349/2020. No Orders were passed on their Applications though arguments were heard on 16.02.2021. Vide Order dated 31.05.2021 the Applications were reopened for hearing for 01.06.2021 along with I.A.2349/2020, 2259/2019 & 4109/2020. But on the same day on 31.05.2021, the Hon'ble Acting President retired and in his place, the new Acting President took charge for a period of one day i.e., 01.06.2021. It is submitted that on 01.06.2021 in his capacity as Hon'ble Acting President passed the Impugned Order, allowing I.A.2083(PB)/2019 and approving the Resolution Plan and observed that all the Interim Applications which are pending are at liberty to prosecute the respective litigations without prejudice to the rights of the parties. It is submitted that I.A.2866(PB)/2019 filed by the Appellant, objecting to the approval of the Resolution Plan, which was fixed for hearing on 01.06.2021, was never heard or pronounced. The Resolution Plan is in contravention of the provisions of law as there is discrimination in admission of claims of the Appellants without awarding interest. * The Resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... * Applications of the present Appellants objecting to the Resolution Plan was heard at length and reserved for Orders in January 2021, but subsequently released on 30.05.2021 thereafter on 01.06.2021, the Adjudicating Authority has passed the Impugned Order. * The Plan creates an artificial and arbitrary classification between the same class of Creditors. The Plan contemplates 100% payment to GMADA who has never preferred any claim and other 'Operational Creditors' are only getting 25% of their claim amounts. * To assess the liability of GMADA, the RP had reverted to the Books of Accounts of the 'Corporate Debtor' and no such help or assistance has been responded by the RP, other Creditors though the RP had received the relevant documents from these Appellants, refused to consider their pending claims and kept them in the category of 'unverified'. This Tribunal in 'The Assistant Commissioner of Central Tax' Vs. 'Mr. V. Shanker RP for M/s. Sri Ramanjaneya Ispat Private Limited & Ors.' Comp. App. (AT) (Ins.) No. 56/2021, has held that even Statutory Bodies are bound to file claims as provided in the Rules and Regulations of the Code and merely sending letters cannot be considered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DC and Licence Fee which is in the nature of Statutory Dues and cannot be rejected. * It is also contended that the interest and penal interest forming part of the Appellant's claim is required to be paid as no provision under IBC allows for extinguishing the interest. * It is submitted that there has been material regularity in the conduct of the RP and that the multiple communications sent by the Appellant were never placed before the CoC and seeks that the Appellant's claim be provided for in the approved Plan to its fullest extent. Company Appeal (AT) (Insolvency) No. 269/2022: * It is submitted that the Appellants being the 'Financial Creditor's/Allottees they were discriminated as they were left in the dark inasmuch as the basic sale price was never defined and refund of only 50% of the principal amount was allowed for in the Resolution Plan without interest and despite the fact that 33 Objection Petitions have been preferred against the Resolution Plan, the Impugned Order approving the Resolution Plan was passed without considering these Applications. The Hon'ble Supreme Court in 'Ghanshyam Mishra & Sons Pvt. Ltd.' (Supra), has held that 'when the Resolution Plan is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Plans stood approved in C.P.(IB)-934(PB)/2018 on 01.06.2021. Therefore, the Impugned Order does not suffer from any procedural irregularity. * The Successful Resolution Applicant ('SRA') has already infused a sum of Rs.25Crs./- and the Plan is under implementation. In 'Pratap Technocrat Private Limited & Ors.' Vs. 'Monitoring Committee of Reliance Infratech Ltd & Anr.' 2021 SCC OnLine SC 569, it is held that the Tribunal does not have residual equity-based jurisdiction in Order to direct modifications of claims provided for in the Resolution Plan under 'Ebix Singapore Pvt. Ltd.' Vs. 'Committee of Creditors of Educomp Solutions Ltd. & Anr.' 2021 SCC OnLine SC 707, it is laid down that long delay for approval of the Resolution Plan, adversely effects the commercial assessment of the Plan. Company Appeal (AT) (Insolvency) No.564/2021: * CA2866 of 2019 was filed by the Homebuyers seeking interest to be filed at 18% p.a. as compensation under BBA; to amend Clause 18.4 in accordance with old BBA executed with IREO Hub Allottees. Additional objections were filed by the Appellants on 10.02.2020 wherein the Appellants have prayed for issuance of the request for Resolution Plan to a n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants, seeking the reversal of the effect of Preferential Transactions, under Section 43, 45 & 66 of the Code, wherein the second Appellant/M/s. S. Sony & Company Private Limited is also a party. Thereafter an amendment Application was also filed by the RP to implead the first Appellant in the said Application. * I.A.5591/2020 was filed by the RP against the first Appellant seeking to handover the keys of approximately 83 Flats. It is submitted that these Applications clearly reflected that the Appellants and did not approach the Adjudicating Authority with clean hands. * It is further argued that the Appellants are guilty of suppression as the first Appellant has submitted a claim of Rs.11,26,21,353/- on 01.11.2018 wherein reliance was placed on invoices of 2016 & 2018, but the documents filed did not appear in the records of the 'Corporate Debtor'. The first Appellant was allotted a unit CCB-07-003 in the Project IREO Rise for a consideration of Rs.52,71,196/- vide BBA dated 04.12.2017. A supplementary Agreement was executed wherein the allotted units were changed to JC-001-004 and was subsequently transferred in favour of Mr. Tej Fotedar. First Appellant was also given the k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Secured Creditor does not fall in the same class of Creditors as that of the Appellant and hence the approved Resolution Plan is not discriminatory. * The pendency of the Applications cannot prevent approval of the Resolution Plan as the Code provides for stringent timelines. Company Appeal (AT) (Insolvency) No.804/2021: * It is submitted that 100% of the amount due to the Appellant/GMADA as per the Books of the Accounts of the 'Corporate Debtor' has been admitted in contrast to other 'Operational Creditors' who received only 25% of their admitted claim. Amounts claimed as due by the Appellant on different dates is enumerated as follows: Date Particulars Amount Due (Rs.) 17.10.2018 Admission to CIRP 14.82 Cr. 13.03.2019 Default notice to R1 10.02 Cr. (excluding interest) 26.04.2019 Letter to R2 15.93 Cr. 27.08.2021 Letter to R2 On 01.06.2021: 19.79 Cr. On 27.08.2021: 20.20 Cr. 31.08.2021 Amount accepted by R2 13.71 Cr. * If the claims of the Appellant are considered as prayed for, and its dues continue to increase even during the Moratorium and after preparation of Information Memorandum, no Resolution Plan would have been filed for approval before the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s uploaded on the very same date i.e., on 01.06.2021 regarding approval of the Resolution Plan. * The Appellants in Company Appeal (AT) (Insolvency) No.544/2021 have concealed the Order dated 12.07.2021 passed by the Hon'ble Delhi High Court whereunder the Writ Petition preferred by these Appellants was withdrawn with a liberty given by the Hon'ble High Court to assail the Impugned Order before the appropriate forum on 'merits' and not on the grounds of natural justice. * There is no discrimination between GMADA and other 'Operational Creditors' as the decision of the CoC is final and the claim of GMADA is in a different category as the completion of the entire Project depends on the support of GMADA in obtaining licences, approvals and permits. It is further submitted that the scope of scrutiny by the Adjudicating Authority is very limited and the contention of the Appellants to be treated at par with the 'Operational Creditors', is erroneous. The Judgement of 'Sushil Ansal' (Supra), relied upon by the Appellants is not applicable to the facts of this case as the decrees, which have been passed in the present matter have been passed in favour of the Homebuyers. The decree holder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellants that there were procedural irregularities and that the Impugned Order was passed in violation of the Principles of Natural Justice and further that their Applications were kept pending though they were reserved for Orders and the Application I.A.2083/2019 'approving the Resolution Plan' was allowed without passing Orders in the other IAs filed by all the Appellants herein. It is the case of the Appellants that though the Adjudicating Authority had reserved I.A.1208/2020, 3824/2020 & 1409/2020 and other Applications preferred by the Appellants in these Appeals, without deciding on these IAs, the Adjudicating Authority had approved the Resolution Plan, conditionally which is against the principles laid down by the Hon'ble Supreme Court in 'Ghanshyam Mishra & Sons Pvt. Ltd.' (Supra), that after approval of the Plan no claim of the Creditors or any change in the Resolution Plan would survive. 8. Admittedly, the CIRP was initiated on 17.10.2018, the Public Announcement was made on 23.10.2018, the Expression of Interest ('EoI') in 'Form-G' was published on 16.04.2019, but no response was received and another EoI was published on 28.05.2019 and 9 EoIs were received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent petition has been filed assailing the order dated 01.06.2021 passed in company application being Company Application No. 2083/2019 in Company Petition No. (IB)-934(PB)/2018 titled as "Paramjit Singh Saini Vs. Puma Realtors Private Limited, whereby the learned Tribunal has approved the resolution plan of respondent no. 4 company. 5. After arguing the matter vehemently for about an hour, learned counsel for the petitioners seeks leave to withdraw the present petition with liberty to assail the impugned order on merits before the appropriate appellate forum. 6. The petition is, accordingly, dismissed as withdrawn with liberty as prayed for. 7. It is made clear that grant of the aforesaid liberty to the Petitioner to approach the appropriate forum will not amount to any expression opinion by this Court." (Emphasis Supplied) Civil Appeal No. 6234 of 2021 "Heard learned Counsel for the parties. In light of the order passed by this Court in Civil Appeal No. 6127 of 2021 dated 8th October, 2021, the present Civil Appeal also stands dismissed. Pending application(s), if any, shall stand disposed of." 10. From the aforenoted Order, it is clear that the matter was heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditors from the CoC, pursuant to the order of NCLT in the Doha Bank proceedings, has no practical implication since the resolution plan continues to be approved with a 100% majority even after their exclusion." ........................................................................... "26. The resolution plan was approved by the CoC, in compliance with the provisions of IBC. The jurisdiction of the adjudicating authority under Section 31(1) is to determine whether the resolution plan, as approved by the CoC, complies with the requirements of Section 30(2). NCLT is within its jurisdiction in approving a resolution plan which accords with IBC. There is no equity-based jurisdiction with NCLT, under the provisions of IBC." ........................................................................... "30. The jurisdiction which has been conferred upon the adjudicating authority in regard to the approval of a resolution plan is statutorily structured by sub-section (1) of Section 31. The jurisdiction is limited to determining whether the requirements which are specified in sub-section (2) of Section 30 have been fulfilled. This is a jurisdiction which is statutorily-defined, recog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 and Respondent 11 did not choose to challenge the order of the Appellate Tribunal. 64. We need to take note of the interest of over 23,000 shareholders and thousands of employees of Respondent 1. Now, about Rs 300 crores has also been approved by the shareholders to be raised by Respondent 1. It is stated that about Rs 63 crores has been infused into Respondent 1 to make it functional. There are many on-going projects of public importance undertaken by Respondent 1 in the nature of construction activities which are at different stages. 65. We remind ourselves of the ultimate object of the Code, which is to put the corporate debtor back on the rails. Incidentally, we also note that no prejudice would be caused to the dissenting creditors as their interests would otherwise be secured by the resolution plan itself, which permits them to get back the liquidation value of their respective credit limits. Thus, on the peculiar facts of the present case, we do not wish to disturb the resolution plan leading to the on-going operation of Respondent 1." (Emphasis Supplied) 13. In this judgement, the Hon'ble Apex Court has observed that as the requisite percentage of the Voting Share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiation with the prospective resolution applicant, as to how and in what manner the corporate resolution process is to take place." ........................................................................... "85. Indeed, if an "equality for all" approach recognising the rights of different classes of creditors as part of an insolvency resolution process is adopted, secured financial creditors will, in many cases, be incentivised to vote for liquidation rather than resolution, as they would have better rights if the corporate debtor was to be liquidated rather than a resolution plan being approved. This would defeat the entire objective of the Code which is to first ensure that resolution of distressed assets takes place and only if the same is not possible should liquidation follow." ........................................................................... "88. By reading para 77 (of Swiss Ribbons [Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17] ) dehors the earlier paragraphs, the Appellate Tribunal has fallen into grave error. Para 76 clearly refers to the UNCITRAL Legislative Guide which makes it clear beyond any doubt that equitable treatment is only of sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally as they will destroy the very objective of the Code while the Adjudicating Authority cannot interfere on merits with the commercial decision taken by the CoC, the limited Judicial Review available is to see that the CoC has taken into account the fact that the 'Corporate Debtor needs to be kept going as a going concern during the Insolvency Resolution Process, that it needs to 'maximise the value of its assets' and the interest of all stakeholders'. 16. In the instant case, what has to be kept in mind is that the 'Corporate Debtor' is a Real Estate Company involved in construction of Housing and Commercial Units and the land on which the construction is to be completed belongs to GMADA. As the nature of the activity of the 'Corporate Debtor' is dependent on the land owned by GMADA, the commercial decision taken by the CoC to make a provision in the Resolution Plan with respect to the Statutory Dues owed to GMADA, cannot be faulted with, though GMADA has failed to make the requisite claim, as provided for under the Code, but has been in communication with the RP. Though we do not appreciate the act of GMADA not having filed their claim, the fact remains that the 'Real Estate P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hon'ble Supreme Court in 'K. Sashidhar' Vs. 'Indian Overseas Bank & Anr.' (2019) 5 SCC 150, and 'Kalparaj Dharamshi & Anr.' Vs. 'Kotak Investment Advisors Limited' (2021) 10 SCC 401, has clearly laid down that the Commercial Wisdom of the CoC is not justiciable and it is not open to the Adjudicating Authority or the Appellate Authority to take into consideration any factor other than those specified in Section 30(2) or Section 61(3) of the Code. Learned Counsel for the Appellant, Mr. Bilal Ali has strenuously contended that the Adjudicating Authority has approved the Resolution Plan in violation of Section 30(2) of the Code and this is in contravention of the ratio laid down by the Hon'ble Supreme Court in 'State Tax Officer (1)' Vs. 'Rainbow Papers Limited' Civil Appeal no. 1661/2020, wherein the Hon'ble Apex Court has held that the word 'May' arising in Section 31(1) of the Code would read as 'Shall' while construing Section 31(1) of the Code. The facts of 'State Tax Officer (1) (Supra), is distinguishable in the sense that dues therein pertain to Statutory Dues and the state being a 'Secured Creditor' under the GVAT Act, should be paid its dues. It was observed that the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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