Views of the Financial Creditors in Class should be elicited by the Authorized Representative prior to CoC meetings in letter and spirit of Section 25A of IBC: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Whether the actions of the Respondent contravened the requirements of Section 25 of the Insolvency and Bankruptcy Code, 2016, was a question considered by the NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI, before a bench consisting of Justice Ashok Bhushan, Chairperson; Justice Jarat Kumar Jain, Member (Judicial); Dr. Alok Srivastava, Member (Technical), in the matter of Amit Goel vs. Piyush Shelters India Private Ltd. and Ors. [Company Appeal (AT) (Ins) No. 700 of 2021], on 18.01.22.

The facts of the case are that the Corporate Insolvency Resolution Process was initiated with respect to the corporate debtor Piyush Shelters India Pvt. Ltd. vide order of Adjudicating Authority on 03.12.2018 and Shri Swami Deen Gupta was appointed as the Insolvency Resolution Professional (RP). In August 2019 the final resolution plan was submitted and before the e-voting could take place on 25.08.2018 the Maya Group withdrew its resolution plan citing some defects in the lease deed that would hamper the execution of the resolution plan, if approved. The RP thereafter filed application before the Adjudicating Authority for rejection of this resolution plan. The present appeals have been filed under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 assailing the judgment dated 14.7.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Allahabad Bench). All the three appeals have been filed against and assailing the common Impugned Order. By the Impugned Order dated 14.7.2021, the Adjudicating Authority has approved the resolution plan submitted by Mr. Naveen Kumar Gupta as lead member of the consortium of Maya Buildcon Private Ltd., Geotech Homz Private Ltd. and Naveen Kumar Gupta, which is the successful resolution applicant.

The Learned Counsel for the Appellants, assailed the impugned order on, among others, the grounds that firstly, that no prior voting by the financial creditors in class was organized by the authorized representative, thereby contravening provisions of Section 25A of the IBC in letter and spirit; secondly that the Impugned Order had been passed while an earlier appeal filed by the Resolution Applicant for consideration of his resolution plan was pending before the Adjudicating Authority. Since no orders have been passed with regards to it, the Committee of Creditors (CoC) could not have considered the resolution plan submitted by the consortium.

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, in light of the facts, submissions, and consideration of precedents and legal provisions, set aside the impugned order dated 14.7.2021 and directed that the process be started afresh with claims of homebuyers or allottees accepted by the Resolution Professional by giving them realistic time limit for submission of claims, in keeping with the order of the Adjudicating Authority, leading to a revised information memorandum, which should then be used for inviting Expressions of Interest. In the CIRP, it was directed that the views of the financial creditors in class should be elicited by the Authorized Representative prior to CoC meetings in letter and spirit of section 25A of IBC. Thereafter, it was mandated that the CoC shall consider the resolution plans so received in accordance with the provisions laid down in law. For this entire exercise, the Tribunal allowed a period of 90 days to the CoC from the date of the order to complete the entire exercise, and accordingly disposed of the appeals.

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Judgement reviewed by Bhargavi

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