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Judgment
Anant Bijay Singh (J)
Heard Learned Counsel for the Appellants and Respondent. The Appellants are altogether 33 in Nos. (Homebuyers) are aggrieved by the Impugned Order dated 13.10.2020 passed by Hon'ble National Company Law Tribunal, Allahabad Bench in Company Petition (IB) No. 41/ALD/ 2019, titled as "Corporation Bank" the applicant bank/ Financial Creditor vs. "EMMVEE Infrastructures (India) Pvt. Ltd." respondent/ Corporate Debtor, whereby the Learned Adjudicating Authority have admitted that the application filed by the Applicant under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC in short) and have further appointed Mr. Manish Agarwal Registration Number IBBI/IPA-002/IP-N00223/2017-2018/ 10904 as Interim Resolution Professional (IRP) of the Corporate Debtor.
The Appellants were not party before the Adjudicating Authority and submitted that since they are homebuyers and Financial Creditors (Unsecured) their interest is jeopardized as the Hon'ble Adjudicating Authority have failed to consider the Judgements of the Hon'ble NCLAT in 'Flat Buyers Association Winter Hills-77, Gurgaon v. Umang Realtech Private Limited through IRP & Ors.' in Company Appeal (AT) (Insolvency) No. 926 of 2019.
Respondent have appeared and filed their Reply Affidavit and also Written Submissions. In the course of the arguments they submitted that Applicant herein are not parties to the proceedings before the Adjudicating Authority and the ratio 'Flat Buyers Association Winter Hills-77, Gurgaon v. Umang Realtech Private Limited through IRP & Ors.' Have no bearing.
Learned Counsel for the Appellant on the other hand submitted that Appellant (herein) have preferred the Appeal under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (IBC in short). The Appellants herein are homebuyers and Financial Unsecured Creditors.
During the course of the arguments attention of this Tribunal was drawn to Section 21 of the Insolvency and Bankruptcy Code, 2016 (IBC in short) which deals with the 'Committee of Creditors' Section 21(2)
"21. Committee of creditors. -.................... (2) The committee of creditors shall comprise all financial creditors of the corporate debtor:
Provided that a [financial creditor or the authorised representative of the financial creditor referred to in sub-section (6) or sub-section (6A) or sub-section (5) of section 24, if it is a related party of the corporate debtor,] shall not have any right of representation, participation or voting in a meeting of the committee of creditors.
[Provided further that the first proviso shall not apply to a financial creditor, regulated by a financial sector regulator, if it is a related party of the corporate debtor solely on account of conversion or substitution of debt into equity shares or instruments convertible into equity shares [or completion of such transactions as may be prescribed,] prior to the insolvency commencement date.];"
Attention of this Court was also drawn to the provisions of Section 25A of the Code which reads as under: -
"[25A. Rights and duties of authorised representative of financial creditors. - (1) The authorised representative under sub-section (6) or sub-section (6A) of section 21 or sub-section (5) of section 24 shall have the right to participate and vote in meetings of the committee of creditors on behalf of the financial creditor he represents in accordance with the prior voting instructions of such creditors obtained through physical or electronic means.
(2) It shall be the duty of the authorised representative to circulate the agenda and minutes of the meeting of the committee of creditors to the financial creditor he represents.
(3) The authorised representative shall not act against the interest of the financial creditor he represents and shall always act in accordance with their prior instructions: Provided that if the authorised representative represents several financial creditors, then he shall cast his vote in respect of each financial creditor in accordance with instructions received from each financial creditor, to the extent of his voting share: Provided further that if any financial creditor does not give prior instructions through physical or electronic means, the authorised representative shall abstain from voting on behalf of such creditor.
[(3A) Notwithstanding anything to the contrary contained in sub-section (3), the authorised representative under sub-section (6A) of section 21 shall cast his vote on behalf of all the financial creditors he represents in accordance with the decision taken by a vote of more than fifty per cent. of the voting share of the financial creditors he represents, who have cast their vote: Provided that for a vote to be cast in respect of an application under section 12A, the authorised representative shall cast his vote in accordance with the provisions of sub-section (3).]
(4) The authorised representative shall file with the committee of creditors any instructions received by way of physical or electronic means, from the financial creditor he represents, for voting in accordance therewith, to ensure that the appropriate voting instructions of the financial creditor he represents is correctly recorded by the interim resolution professional or resolution professional, as the case may be.
Explanation. -For the purposes of this section, the "electronic means" shall be such as may be specified.]
Attention of the Court was also drawn to provisions of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, Regulation 16(A).
"Regulation- [16A. Authorised representative.
(1) The interim resolution professional shall select the insolvency professional, who is the choice of the highest number of financial creditors in the class in Form CA received under sub-regulation (1) of regulation 12, to act as the authorised representative of the creditors of the respective class:
Provided that the choice for an insolvency professional to act as authorized representative in Form CA received under sub-regulation (2) of regulation 12 shall not be considered.
(2) The interim resolution professional shall apply to the Adjudicating Authority for appointment of the authorised representatives selected under sub-regulation (1) within two days of the verification of claims received under sub-regulation (1) of regulation 12.
(3) Any delay in appointment of the authorised representative for any class of creditors shall not affect the validity of any decision taken by the committee.
(4) The interim resolution professional shall provide the list of creditors in each class to the respective authorised representative appointed by the Adjudicating Authority.
(5) The interim resolution professional or the resolution professional, as the case may be, shall provide an updated list of creditors in each class to the respective authorised representative as and when the list is updated.
Clarification: The authorised representative shall have no role in receipt or verification of claims of creditors of the class he represents.
(6) The interim resolution professional or the resolution professional, as the case may be, shall provide electronic means of communication between the authorised representative and the creditors in the class.
(7) The voting share of a creditor in a class shall be in proportion to the financial debt which includes an interest at the rate of eight per cent per annum unless a different rate has been agreed to between the parties.
(8) The authorised representative of creditors in a class shall be entitled to receive fee for every meeting of the committee attended by him in the following manner, namely: -
Number of creditors in the class
Fee per meeting of
the committee (Rs.)
10-100
15,000
101-1000
20,000
More than 1000
25,000
(9) The authorised representative shall circulate the agenda to creditors in a class, and may seek their preliminary views on any item in the agenda to enable him to effectively participate in the meeting of the committee:
Provided that creditors shall have a time window of at least twelve hours to submit their preliminary views, and the said window opens at least twenty-four hours after the authorised representative seeks preliminary views:
Provided further that such preliminary views shall not be considered as voting instructions by the creditors.]"
Learned Counsel for the Respondent fairly submitted that the directions may be given to Appellants to file their written claims before the Respondent, within a particular timeframe, in terms of the aforesaid provisions.
After hearing the Learned Counsel for the Parties and after perusal of the record and the provisions of the law, we are of the considered opinion that the Appellants are hereby directed to file their claims in terms of the aforesaid provisions before the Resolution Professional/ Respondents within two weeks from today.
Further, Learned Counsel for the Resolution Professional/ Respondent is hereby directed to verify the claims in terms of the aforesaid provisions and forward the genuine claims of the Learned Counsel for the Appellants to
Keeping in view, the timeline provided by the IB Code, with the aforesaid directions the Appeal is hereby disposed of, no order as to cost.
The Registry is directed to upload this Judgement on the website of this Appellate Tribunal.
Registry is directed to send a copy of the Judgement to the National Company Law Tribunal, Allahabad Bench.