Bipin Sharma & ORS vs. earth Infrastructure limited
Company Appeal (AT) (Ins.) No. 916 of 2021
1.
1.A resolution plan was submitted by M/s. Alpha Corp. Development Private Limited (Respondent No.2) in the Corporate Insolvency Resolution Process (in short ‘CIRP’) of the corporate debtor Earth Infrastructure Ltd which was approved by the NCLT vide order dated 08.06.2021.
2.The proposed resolution plan does not make any provision regarding payment of debt to 56% of the financial creditors (home buyers), who either voted against the resolution plan or who did not vote at all. Appellants are challenging the order
Issue: whether the plan approved was in compliance with section 30(2) of the Code?
Arguments:
For Appellants:
1.Counsel for appellant submitted that appeal is maintainable because the Adjudicating Authority has not touched upon various aspects relating to non-compliance of section 30 (1) and (2) of the IBC while examining and approving the Resolution plan filed by Respondent No. 2 and therefore, it is absolutely necessary that this appeal be heard and the order approving the resolution plan be examined for non-compliance of section 30 of the IBC.
For respondents:
1.Counsel draw attention to section 25-A (3A) of the IBC wherein it is provided that the allottees in a housing project shall be represented in the CoC meeting through their “Authorised Representative’, who will act and vote in the CoC on the basis of the views given by simple majority i.e. more than 50% of the homebuyers voting in connection with a resolution/proposal. After having gone through this process of submitting their views through the Authorised Representative, the individual homebuyers shall not have any independent right to challenge the action taken by the Authorised Representative, if he has asked in accordance with the requirements of section 25-A (3A).
Decision: Resolution plan was in accordance with section 30(2) of the Code.
Rationale:
1.The Authorised Representative so selected to participates in the CoC meetings as well as in decision making in the CoC, he does so on behalf of all the home allottees/homebuyers and the view of individual homebuyer is therefore subsumed in the majority (of more than 50%) decision coming through that process when the financial creditors in class express views and voted in any matter. This view is then placed before the CoC by the Authorised Representative.
2.It also noted that a miniscule number of homebuyers have come before us as applicants and out of this small number, six have not even cared to cast their vote, have to sail with the decision of the majority of homebuyers. This is the scheme of IBC.
3.It held that appellants, who have exercised their right to vote or not cared to exercise their right to vote form a miniscule minority, opposing the approval of resolution plan. Having done so, they now do not possess an independent right to challenge the majority vote (99.97%) of the homebuyers.
Order:
