National Company Law Appellate Tribunal, New Delhi: In an appeal against the rejection of application objecting to the Resolution Plan categorizing homebuyers into affected and unaffected groups based on NOC possession submitted by the respondent, a 3-member bench comprising of Ashok Bhushan, J.*, Barun Mitra (Technical Member) and Arun Baroka (Technical Member), affirmed the validity of the Resolution Plan approved by the CoC and rejected the appellant’s objections based on discrimination and promissory estoppel.
In the instant matter, the Corporate Debtor, initiated the ‘Samriddhi Garden’ project in Bhandup, Mumbai. The LIC Housing Finance Limited (LIC HFL) granted a Term Loan Facility of Rs.130 crores to the Corporate Debtor on 15-09-2017, with specific conditions regarding the creation of third-party rights. The appellant entered into ten separate Agreements for sale of flats in the project with the Corporate Debtor on 09-08-2018.
A Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 11-08-2020. The appellant’s claim for 10 flats was initially admitted by the Resolution Professional but later rejected due to the absence of a No Objection Certificate (NOC) from LIC HFL. Resolution 2 submitted a Resolution Plan categorizing homebuyers into affected and unaffected groups based on NOC possession.
The appellant filed an application objecting to the Resolution Plan, which was rejected by the Adjudicating Authority vide order dated 19-07-2023. Aggrieved by the impugned order passed by the Adjudicating Authority, the appellant preferred the present appeal challenging the same.
Rejection of application, asserting that the admitted claim should not be treated differently.
Classification of homebuyers as affected and unaffected in the Resolution Plan is contested.
Application of the principle of promissory estoppel against the Resolution Plan.
The appellant claimed discrimination in the Resolution Plan and argued that the admitted claim should be treated on par with other homebuyers. Resolution Professional defended the classification, stating that approved Resolution Plans by the CoC should not be challenged by individual creditors. Respondent 2 also supported the classification. The LIC HFL backed the impugned order, highlighting the approval of the Resolution Plan and lack of challenge by the appellant.
The NCLAT observed that the Adjudicating Authority justified the rejection of application based on Kensington Boulevard Apartments v. NBCC (India) Ltd., (2022) 1 SCC 401, which prohibits individual objections by Homebuyers after CoC approval. The NCLAT upheld the classification of homebuyers in the Resolution Plan based on Sabari Reality (P) Ltd. v. Sivana Realty (P) Ltd., Company Appeal (AT) (Insolvency) No.1162 of 2023, order dated 02-11-2023.
The NCLAT emphasized that the Resolution Plan, approved with 99.96% CoC vote, deems Homebuyers as having voted in favor, barring individual objections. While rejecting the application of promissory estoppel, the NCLAT held that the doctrine of promissory estoppel cannot be applied against a Resolution Applicant and approved Resolution Plan, as the plan’s approval is based on commercial wisdom and compliance with IBC provisions.
The NCLAT dismissed the appeal on not finding any error in the Adjudicating Authority’s decision.
[Fervent Synergies Ltd. v. Manish Jaju, 2023 SCC OnLine NCLAT 2154, order dated 02-11-2023]
*Judgment by Justice Ashok Bhushan
Advocates who appeared in this case :
Mr. Arunava Mukherjee, Mr. Nisarg P. Khatri, Counsel for the Appellant
Mr. Abhijeet Sinha, Mr. Dhaval Deshpande, Counsel for the Respondent No. 1
Mr. Arun Kathpalia, Sr. Advocate with Mr. Vishesh Kalra, Mr. Kunal Kanungo, Counsel for the Respondent No. 2
Ms. Anannya Ghosh, Ms. Doel Bose, Counsel for LIC HFL