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Mr. Ankur Narang &Ors vs. Mr. Nilesh Sharma - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (20 Oct 2023)

Once CoC has approved the resolution plan by requisite majority which is in consonance with applicable provisions, same cannot be a subject matter of judicial review

MANU/NL/0893/2023

Insolvency

The present appeal filed under Section 61 of Insolvency and Bankruptcy Code, 2016 ("IBC") by the Appellants arises out of the Order passed by the Adjudicating Authority.The Appellants submitted that, the Adjudicating Authority wrongly dismissed their application without considering the resolution plan which plan is not in consonance with Section 30(2) of the IBC and Regulation 38 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations").

In the present facts of the case, the Appellants were given a chance to raise their objections before the RP as well as the Authorized Representative of the Home Buyers. The RP had also facilitated the Appellants in routing their objections to the Authorized Representative and the latter had provided them the window of opportunity of taking up their issues with the resolution applicants. The RP and the Authorized Representative did not fail in the discharge of their responsibilities and no cause of action survives on this count.

It is an undisputed fact that, the Appellants constitute a total of 25 home buyers with admitted claims of about Rs.14 crore as against a total of approximately 1500 home buyers in the said project with a claim totalling to Rs. 1110.20 crores. The resolution plan has been admittedly approved by the CoC with 96.93% vote share.

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 supremacy of the commercial wisdom of CoC has been reaffirmed repeatedly and consistently by the Supreme Court. It was also submitted that dissenting minority amongst Creditors in class have to be treated at par with other Home Buyers in terms of theJaypee Kensington Boulevard Apartments Welfare Association &Ors vs. NBCC(India) Ltd.(Jaypee judgment).

The 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 subject matter of judicial review and modification.

Merely because there is a reduction in the claim of any creditor does not make the resolution plan fall foul of law. Present Tribunal agree with the Adjudicating Authority that "resolution plan providing a lesser amount than admitted does not make it illegal". There is nothing to show that there has been transgression of the bounds of rules and regulations which have caused any serious miscarriage of justice to the Appellants. The Adjudicating Authority did not commit any error in dismissing IA. There are no good grounds to entertain this appeal. Appeal dismissed.

Tags : RESOLUTION PLAN   MAJORITY   REVIEW  

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