The main legal point established in the judgment is the mandatory nature of the voting share prescribed under the IBC and the discretion to exclude the period of pendency for counting the total period of the Corporate Insolvency Resolution Process based on unforeseen circumstances.

JUDGMENT :

SUDHANSU JYOTI MUKHOPADHAYA, J.

As both the appeals relate to ‘Corporate Insolvency Resolution Process’ against ‘Jaypee Infratech Limited’ (Corporate Debtor) they were heard together and disposed of by this common order.

2. The relevant facts of the case are as follows.

The ‘Corporate Insolvency Resolution Process’ was initiated against ‘Jaypee Infratech Limited’ pursuant to an application under Section 7 of the ‘Insolvency and Bankruptcy Code, 2016 (for short, ‘the I&B Code’) filed by the ‘IDBI Bank Limited’ which was admitted with respect to same ‘Corporate Debtor’. One ‘Chitra Sharma’ moved before the Hon’ble Supreme Court, in ‘Chita Sharma Vs. Union of India’ wherein the Hon’ble Supreme Court by its judgement reported in ‘2018 SCC OnLine SC 874’ (decided on 9th August, 2018) passed the following order and directions”

“55. We, accordingly, issue the following directions:

(i) In exercise of the power vested in this Court under Article 142 of the Constitution, we direct that the initial period of 180 days for the conclusion of the CIRP in respect of JIL shall commence from the date of this order. If it becomes necessary to apply for a further extension of 90 days, we permit the NCLT to pass appropriate orders in accordance with the provisions of the IBC;

(ii) We direct that a CoC shall be constituted afresh in accordance with the provisions of the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, more particularly the amended definition of the expression “financial creditors”;

(iii) We permit the IRP to invite fresh expressions of interest for the submission of resolution plans by applicants, in addition to the three short-listed bidders whose bids or, as the case may be, revised bids may also be considered;

(iv) JIL/JAL and their promoters shall be ineligible to participate in the CIRP by virtue of the provisions of Section 29A;

(v) RBI is allowed, in terms of its application to this Court to direct the banks to initiate corporate insolvency resolution proceedings against JAL under the IBC;

(vi) The amount of Rs. 750 crores which has been deposited in this Court by JAL/JIL shall together with the interest accrued thereon be transferred to the NCLT and continue to remain invested and shall abide by such directions as may be issued by the NCLT.”

3. After the decision of the Hon’ble supreme Court, during the ‘Corporate Insolvency Resolution Process’, the ‘Home Buyers Association’ preferred an application before the Adjudicating Authority (National Company Law Tribunal), Allahabad Bench on 17th September, 2018 seeking clarification as to what will be the manner in which the voting percentage of allottees (Financial Creditors) has to be calculated.

4. On 13th December, 2018 the Hon’ble Members of Adjudicating Authority (National Company Law Tribunal), Allahabad Division Bench expressed difference of opinion, as under :

Question of law raised in the order of NCLT, Allahabad Division Bench :

(i). The question of law that has been raised in both applications, one by Nine Home Buyers Association and other by eight Financial Creditors, all of them being the members of the Committee of Creditors (CoC) is whether the various threshold voting share fixed for the decision of the CoC under various sections of the I & B Code needs to be followed literally or whether they are directory, and if so, what procedure has to be followed in determining the voting percentage among the CoC to pass a particular resolution.

Decision of Hon’ble Member (Judicial)

(ii). Therefore, in order to advance the object of I& B Code and the Amendment Act 2 of 2018 and with a view to safeguard the interests of all classes of creditors and all stakeholders, I am of the considered view, “That in case where the CoC comprise Real Estate Class of creditors upto 50% of voting share or more than when there is a dead lock in passing the resolutions, the highest number of voting share in favour of the resolution has to be taken into consideration without looking into the t