National Company Law Appellate Tribunal, New Delhi: In appeals challenging the rejection of application under Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC), rejection of objections to the Resolution Plan and the approval of the Resolution Plan itself, a 3-member bench of Ashok Bhushan,* J., (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), upheld the NCLT’s order and the Resolution Plan.
Brief Facts
In the instant matter, the Corporate Insolvency Resolution Process (CIRP) was initiated against M/s Snehanjali and S.B. Developers Pvt. Ltd. based on an application filed by 67 homebuyers as financial creditors. The CIRP was admitted by the NCLT, Mumbai, vide order dated 07-03-2024, and public announcements were made accordingly.
The respondent-Resolution Professional (RP) was appointed and the Committee of Creditors (CoC) was constituted. Four resolution plans were received, and in the CoC meeting held on 25-09-2024, the resolution plan submitted by La Mer Developers Ltd. and Neel Builders & Developers was approved with 83.46% voting share.
The appellant filed the three appeals challenging the rejection of his application under Section 43 of the IBC for avoidance of preferential transactions, rejection of his objections to the Resolution Plan and the approval of the Resolution Plan itself.
Moot Point
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Whether a single homebuyer has the locus standi to challenge the approval of a resolution plan by the CoC?
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Whether the application filed under Section 43 of the IBC by the homebuyer maintainable?
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Whether the CIRP and approval of the resolution plan suffered from procedural impropriety or collusion?
NCLAT’s Observations
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Locus Standi of the Appellant
The NCLAT reaffirmed the legal position that homebuyers form a class of financial creditors and are represented by an Authorised Representative. The NCLAT asserted that individual homebuyers do not have independent locus standi to challenge the resolution plan once approved by the majority of the CoC.
The NCLAT noted that the Adjudicating authority held that “individual homebuyers may have divergent views but ultimately they vote as a class and individual homebuyers cannot claim to be ‘dissenting homebuyers’.” The NCLT further stated that “the Applicants being disgruntled homebuyers in a minority position have no option but to ‘sail along’ or ‘drag along’ with overwhelming majority which has accepted the resolution plan.”
The NCLAT heavily relied on the Jaypee Kensington Boulevard Apartments Welfare Assn. v. NBCC (India) Ltd., (2022) 1 SCC 401, where the Supreme Court held that “there is absolutely no scope for any particular person standing within that class to suggest any dissension as regards the vote over the resolution plan.” The NCLAT held that individual dissenting homebuyers cannot override the collective commercial wisdom of the majority.
On the Section 43 IBC application regarding preferential transactions, the NCLAT held the application to be frivolous as Section 43 clearly mandates that only the Resolution Professional or Liquidator may file for avoidance of preferential transactions.
“A plain reading of Section 43 of the Code makes it amply clear that an application under that Section can only be filed by an Insolvency Professional… and none else.”
While upholding the rejection of Section 43 IBC application by NCLT, the NCLAT deleted the cost of ₹50,000/- imposed by the NCLT as the appellant was a single homebuyer and not a habitual litigant.
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Approval of the Resolution Plan
The NCLAT found no infirmity in the plan and noted that the plan provided settlement through delivery of units to both claimants and non-claimants (all 297 unit-holders), and fulfilled all the requirements under Section 30(2) of the IBC. The NCLAT held that the Resolution Plan is compliant with Section 30(2) of the IBC.
NCLAT’s Decision
The NCLAT dismissed the appeals and upheld the NCLT’s order upholding the Resolution Plan approved by CoC with 83.46% voting share except for setting aside the cost of ₹50,000/- imposed on the appellant.
[Ramprasad Vishvanath Gupta v. Dinesh Kumar Deora, 2025 SCC OnLine NCLAT 959, Decided on 21-05-2025]
*Judgment by Justice Ashok Bhushan
Advocates who appeared in this case :
Mr. Diwakar Singh, Advocate along with Mr. Ramprasad Gupta, Counsel for the Appellants
Mr. Rahul Chitnis and Mr. Niyati Merchant, Counsel for the Respondent No. 1
Mr. Ishwar Nankani, Counsel for the Respondent No. 2