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SUPREME COURT OF INDIA
A.M. KHANWILKAR, DINESH MAHESHWARI, SANJIV KHANNA, JJ.
Jaypee Kensington Boulevard Apartments Welfare Association & Ors - Appellant
Versus
NBCC (INDIA) Ltd. & Ors - Respondent
Civil Appeal No. 3395, 3396 of 2020, T.C (C) Nos. 234, 235, 236, 237, 238, 239, 240, 241, 242, 243 of 2020, Civil Appeal No. 1056 of 2021 @ SLP(C) No. 5144 of 2021@ Diary No. 18129 of 2020, Civil Appeal No. 1057 of 2021 @ SLP(C) No. 10543 of 2020 and Diary No. 20274 of 2020
Decided On : 24-03-2021
Companies Act, 2013 - Section 230 - Insolvency and Bankruptcy Code, 2016 - Section 7- Special leave petition - Corporate insolvency resolution process - Resolution plan - Corporate insolvency resolution process in relation to corporate debtor JIL got initiated on when National Company Law Tribunal 9[Hereinafter also referred to as ‘Adjudicating Authority’ or ‘NCLT’ - As shall be noticed, matter before Allahabad Bench was later on transferred to New Delhi Bench of Tribunal - These expressions ‘the Tribunal’ or ‘NCLT’ or ‘the Adjudicating Authority’ refer to said transferee Bench too, as per given context.], Allahabad Bench admitted the petition filed by one of financial creditors, IDBI Bank Limited, under Section 7 of Code - When Interim Resolution Professional invited claims in this CIRP, treatment of homebuyers became an issue contentious, because they were treated only as ‘other creditors’, not at par with financial and operational creditors - Whether approval of the resolution plan of NBCC is vitiated because of simultaneous voting over two resolution plans in Committee of Creditors? - Held, Court also deem it appropriate to clarify that processing of modified/fresh resolution plans, as permitted and envisaged by this judgment, is required to be completed within extended time and for that matter, other aspects like reconciliation of accounts between JAL and JIL or resolution of issues related with financial creditor of subsidiary of corporate debtor shall be matters to be dealt with separately and decision on resolution plan by Committee of Creditors need not wait resolution of those issues - It is made clear that IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum - Said resolution applicants shall be expected to proceed on basis of information memorandum already issued by IRP and shall also take into account facts noticed and findings recorded in this judgment - All appeals, transferred cases, transfer petitions and interlocutory applications in this batch stand disposed of.
JUDGMENT :
DINESH MAHESHWARI, J.
| Table of Contents | ||
| S. No. | Particulars | Paragraphs |
| 1. | Introductory | 1-3 |
| 2. | Brief outline and sketch | 4-5 |
| 3. | The parties and their respective roles and interests in the matter | 6-14.5 |
| 4. | Points for determination | 15(A to N) |
| 5. | Relevant factual and background aspects | 16-19.1 |
| 6. | Orders and directions in the case of Chitra Sharma | 20-23 |
| 7. | Another round in this Court and further enlargement of time for CIRP in question | 24-32 |
| 8. | Yet another litigation in this Court relating to preferential transactions and lenders of JAL | 33-37 |
| 9. | The Resolution Plan | 38-40 |
| 10. | Order dated 03.03.2020 by the Adjudicating Authority in approval of the resolution plan with modifications | 41-52 |
| 11. | Order dated 22.04.2020 by NCLAT making interim arrangement | 53-54 |
| 12. | The relevant statutory provisions | 55-60 |
| 13 | JIL’s CIRP: Chronicle of complications | 61-62 |
| 14. | The objectives and scheme of IBC | 63-64.1 |
| 15. | Approval of resolution plan: Crucial steps and role players Committee of Creditors: the protagonist of CIRP | 65-66.2 67-70 |
| 16. | Point A: Contours of the jurisdiction of Adjudicating Authority in dealing with a resolution plan | 71-79 |
| 17. | Point B: Simultaneous voting over two resolution plans by CoC | 80-85 |
| 18. | Point C: Matters related with the land providing agency YEIDA | 86-109 |
| 19. | Point D: Treatment of the debt of dissenting financial creditor ICICI Bank Limited | 110-130 |
| 20. | Point E: Matters related with fixed deposit holders | 131-136 |
| 21. | Point F: Objections of the financial creditor of subsidiary of the corporate debtor | 137-142 |
| 22. | Point G: Grievance of agreement holders | 143-148 |
| 23. | Point H: Grievance of minority Shareholders | 149-154 |
| 24. | Point I: Matters related with dissatisfied homebuyers of JIL | 155-175 |
| 25. | Point J: INR 750 crores and accounting between JAL and JIL | 176-192 |
| 26. | Point K: Security interest of the lenders of JAL and effect of judgment dated 26.02.2020 | 193-206 |
| 27. | Point L: Other issues requiring clarification/directions | 207-210 |
| 28. | Point M: Modified mechanism for implementation by the Appellate Authority | 211-215 |
| 29. | Point N: Summation of findings; final order and conclusion | 216-227 |
| 30. | Acknowledgement | 228 |
Introductory
1. Permission to file special leave petition(s) and leave granted in respective Petition(s) for Special Leave to Appeal.
2. This batch of civil appeals, special appeals and transfer cases essentially relate to the resolution plan[Hereinafter, at some places, it has also been referred to as ‘the plan’] in the corporate insolvency resolution process[‘CIRP’ for short.] under the Insolvency and Bankruptcy Code, 2016[Hereinafter also referred to as ‘the Code’ or ‘IBC’.] concerning the corporate debtor, Jaypee Infratech Limited[Hereinafter also referred to as ‘JIL’.], whose activities do impact a large number of persons/entities, including the buyers of flats/apartments[Hereinafter generally referred to as ‘the homebuyers’.] in its real estate development projects.
2.1. As shall be noticed hereafter, CIRP in relation to the corporate debtor JIL has been entangled in various disputes in the past and even when the resolution plan submitted by the resolution applicant, NBCC (India) Limited[Hereinafter also referred to as ‘NBCC’.] has been approved by the Committee of Creditors[‘CoC’ for short.] by a substantial majority of 97.36% of voting share of the financial creditors, several disputes/objections have come up from various stakeholders and role players, voicing the concerns of their own, like dissenting financial creditors, dissatisfied homebuyers, displeased land providing agency, disillusio
The commercial wisdom of the Committee of Creditors prevails in approving resolution plans, and dissenting creditors cannot claim preferential treatment beyond statutory provisions.
The court affirmed that the approved resolution plan under the Insolvency and Bankruptcy Code must ensure equitable treatment of all creditors and conform to regulatory requirements for successful co....
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