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TMI Blog2023 (10) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... ought out before us. The present Appellants constitute a clutch of 25 applicants, each being allottees of residential flats in a project, namely, Canary Greens, Gurugram (hereinafter referred to as "Project"). The said project was being developed by Today Homes and Infrastructure Pvt. Ltd. - Corporate Debtor. Since the possession of the flats was not offered by the Corporate Debtor within the prescribed time, the Appellants raised complaint before the National Consumer Disputes Redressal Commission ("NCDRC" in short) following which the NCDRC ordered on 31.01.2017 that the Corporate Debtor shall refund the entire amount received from each of the complainants including Service Tax and VAT along with compensation in the form of simple interest @ 10% p.a. besides Rs.10,000/- as the litigation cost, which payments were to be made within three months from the date of the order. With these orders, NCDRC had disposed of all the complaints. The Appellants filed the execution petition in pursuance of the NCDRC order and received compensation until 31.10.2019 on which date the Corporate Debtor was admitted into Corporate Insolvency Resolution Process ("CIRP" in short). The principal amount h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l creditors, the Appellants are required to be paid in priority over the financial creditors who voted in favour of the resolution plan as contemplated in Regulation 38 of the CIRP Regulations. By providing partial payment and that too after sale of the respective flats of the Appellants, the resolution plan is contingent in nature and therefore contrary to the IBC. It has also been contended that the Appellants being secured Financial Creditors, will rank at the top in terms of the waterfall mechanism under Section 53 of the IBC along with dues of the workman after CIRP costs and are entitled for their full claims. 6. Refuting the above submissions, the Learned Counsel for the Respondent No.1 submitted that the Appellants being a minority group of Home Buyers have no locus to challenge the resolution plan especially when the Home Buyers as a class have voted in favour of the resolution plan. It was also submitted that the Appellants cannot claim that their objections were not given due cognizance since the RP had given them the liberty to raise their objections before the Authorized Representative of the Home Buyers and the Authorized Representative in turn had sent a communicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent No. 1 asserted that the Appellants were given adequate chance to raise their objections before the RP as well as the Authorized Representative of the Home Buyers. There is no merit in the objections raised by the Appellants being a group of individual homebuyers in minority, particularly so, when the plan has been assented to by the Home Buyers as a class. In support of their contention reliance was placed on the judgement of the Hon'ble Apex Court in the Jaypee Kensington Boulevard Apartments Welfare Association & Ors v NBCC(India) Ltd in Civil Appeal No. 3395 of 2020 ("Jaypee" in short). 11. This makes it necessary for us to see at this stage whether the Adjudicating Authority had taken note of Clause 9 of the resolution plan while passing the impugned order which is the main pillar of objection raised by the Appellants. Perusal of the impugned order clearly shows that the Adjudicating Authority had duly considered the objections raised by the Appellants with respect to Clause 9 of the resolution plan and held as follows: - "10. ...... The said clause was part of the plan, and the plan was duly approved by members of CoC with a whopping majority of 96.93%. A resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have no quarrel with the proposition of law laid down in the above judgment. However, we find the facts in that case to be distinguishable from the present matter. During the insolvency proceedings in that case, a resolution plan was presented, making a distinction between home buyers who had sought relief under RERA and those who had not. Those homebuyers who enjoyed RERA relief were made to file their claims in Form-C while other homebuyers were allowed to file claim in Form-CA thus putting the latter set of homebuyers to some advantage. However, no such distinction is made in the present case between home buyers who invoked NCDRC remedies and those who did not. All home buyers, irrespective of their foray into the realms of NCDRC or not have been treated as financial creditors and allowed to file their claims in Form-CA and to participate as creditors in a class in the CoC in the present insolvency proceedings. Hence the facts of the two cases being different, the ratio is not applicable. 15. It is the case of the Respondent No. 1 that in the given statutory framework of IBC there is only limited judicial review which can be exercised by the Adjudicating Authority and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s he is authorised to represent, a plan of resolution involving large number of parties (like an excessively large number of homebuyers herein) may never fructify and the only result would be liquidation, which is not the prime target of the Code. In the larger benefit and for common good, the democratic principles of the determinative role of the opinion of majority have been duly incorporated in the scheme of the Code, particularly in the provisions relating to voting on the resolution plan and binding nature of the vote of authorised representative on the entire class of the financial creditor/s he represents. *** *** *** *** 165. In the present case, on one hand, it has consistently been submitted by the stakeholders, particularly the homebuyers, that liquidation of JIL should be eschewed, but on the other hand, some of the associations and homebuyers have attempted to find faults with the resolution plan to which their majority, who voted, took the decision for approval. There is no scope for any homebuyer suggesting himself to be a dissenting financial creditor merely because he was not with majority within the class. His dissatisfaction does not partake the legal charact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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." (Emphasis supplied) 17. The Hon'ble Supreme Court in the Jaypee matter has emphasized that the democratic principles of a determinative role of majority opinion have been enshrined in the statutory construct of the IBC and hence the minority homebuyers have to necessarily sail with the majority within the class. In the present facts of the case, when the majority has approved the resolution plan, the objections raised by the Appellants are inconsequential in so far as they represent the homebuyers in minority. It has been clearly held in the Jaypee matter that when the Home Buyers as a class have voted in favour of a resolution plan, a particular constituent of that class and that too in a minority cannot be heard in opposition to the resolution plan by way of objection as there is no concept of dissenting homebuyers within Creditors in class. Once the CoC has approved the resolution plan by requisite majority and the same is in consonance with applicable provisions of law the same cannot be a subj ..... X X X X Extracts X X X X X X X X Extracts X X X X
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