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Judgment
Rakesh Kumar Jain (Oral)
M/s.Concord Infrastructure Pvt. Ltd has filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as to ‘the Code’) r/w Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016 (hereinafter referred as to as ‘The Rules’) against M/s. Shubhkamna Buildtech Private Limited (Corporate Debtor) before the National Company Law Tribunal, New Delhi Bench –IV (hereinafter referred as to as ‘The Adjudicating Authority), which was admitted on 26.11.2018 and Ms. Gurkamal Hora Arora was appointed as Interim Resolution Professional (IRP). She was replaced by Mr. Anand Sonbhadra who has appointed as Resolution Professional (RP) by the Committee of Creditors (CoC) in its first meeting held on 07.02.2019. The appointment of the RP has also confirmed by the Adjudicating Authority on 12.02.2019. It is submitted by the RP that in terms of the provisions of Section 21(6A)(b) r/w Section 25(B), the homebuyers appointed Mr. Brij Nandan Kalra as their authorised representative which was approved by the Adjudicating Authority vide its order dated 25.01.2019
Shorn of unnecessary details, the Resolution application filed by the present Appellant was approved by the CoC on 17.10.2019. The RP filed an application bearing CA No. 485 of 2019 before the Adjudicating Authority seeking approval of the Resolution Plan of the Appellant which was allowed on 12.09.2022.
It is pertinent to mention that while the application was pending for approval of the Resolution Plan, the present Appellant (SRA) filed an application IA No. 1517 of 2022 on 23.03.2022 before the Adjudicating Authority in which the Appellant made two prayers, namely, to allow them to add the escalation clause in the Resolution plan and to remit the Resolution Plan of the Appellants to the CoC so that the escalation clause may also be added to the Resolution Plan. This application was dismissed on 12.09.2022. As a result, thereof, the Appellant has filed the present appeal.
The following order was passed by this Tribunal on 11.11.2022:
“11.11.2022: Learned Senior Counsel for the Appellants confine his submission only to the effect that a clause is to be added in the plan regarding escalation i.e. Escalation Clause. He submits that the Adjudicating Authority ought to have remitted the plan to the Committee of Creditors (CoC) for limited consideration and Appellant had not proposed to withdraw from the plan and is fully ready to implement the plan subject to consideration of the said Escalation Clause.
Shri Abhishek Anand, Learned Counsel appearing for the Respondent submits that there is no CoC in existence as on date, hence, there is no occasion for remitting the plan and it is the Monitoring Committee which is only functioning.
In facts of the present case, we are of the view that before considering the submissions any further, we permit the Appellant to submit its proposal to Monitoring Committee which may consider in a meeting in which Authorized Representative of the Homebuyers may also be called and submit the decision on the next date to consider the issue further. If so desire, the voting on the proposal may also be considered by the Monitoring Committee.
List the matter on 12.12.2022.”
In compliance of the aforesaid order, the RP filed a compliance affidavit vide diary No. 66364 on 27.01.2023. It is averred in the aforesaid affidavit that the RP received the first proposal from the Appellants on 03.12.2022 wherein the Appellants proposed to insert Clause 7.6 in the Resolution Plan. Clause 7.6 read as under:
“7.6 Escalation of Cost
Any or all variation in the cost of construction and completion of the project, whether on account of inflation in the cost of raw materials used for construction, labour, carriage and freight charges or otherwise from the date of approval of the Resolution Plan by the CoC till the Resolution Plan is approved by the Hon’ble NCLT shall be proportionately distributed on all the allottes / unit holders of the projects of Shubhkamna”
In the proposal letter, the Appellant has indicated an escalation of Rs. 71.029 Crores over and above the amount already approved amount of Rs. 333.00 Crores. It is averred in the affidavit that a meeting of the Monitoring Committee was held on 07.12.2022 in which the Authorized Representative requested that the escalation cost as proposed by the Appellant, may be reduced.
It is further averred in the affidavit that after the meeting dated 07.12.2022, Class of Creditors through their AR sent two proposals to the Appellant which are as follows:
“Set 1
As Per AR, 72 Allottees have forward this set of proposal
“Dear Sir
Meeting of SRA with Homebuyers’ Observers held on 20.12.2022
The Observers of allottes had informal meeting with SRA on the escalation clause on 20.12.2022 and the meeting did not result in any agreed settlement.
However, observers and many allottees after consultation and further negotiation with SRA have decided that a polling be done on the following points to find out the majority view, so that the same can be submitted to NCLAT in line of order dated 11.11.2022
1.Allottees are agreeable to a one time escalation cost of Rs. 192 per sqft over what agreed in Resolution Plan. This amount will be payable at the time of delivery of Unit only as per specification in Resolution Plan.
2.Delivery of units have to be made as per timelines in the approved Resolution Plan. In case if the delivery of units is delayed, then this escalation of Rs. 192 per sqft shall not be payable.
3.There will not be any further escalation.
4.SRA will not further litigate for escalation upon acceptance and communicate about acceptance in NCLAT”.
Set 2
As per AR, 12 Allottees have forward this set of proposal
Dear Sir,
That a polling be done on the followings points to find out the majority view, so that the same can be submitted to NCLAT in line of order dated 11.11.2022
1.A portion of point number 8.6.15, page number 36 to 61 of the Revised Resolution Plan dated 12.10.2019 should be removed from the Revised Resolution Plan dated 12.10.2019. That’s as under:-
If at any later date, the Resolution Applicant/Corporate Debtor is required to pay any amount over and above the amount provided for in the plan by virtue of NCLT/NCLAT/Court offer, the Homebuyers shall be liable to contribute the excess amount on pro-rate basis.
2.Allottees are agreeable to a one time escalation cost of Rs. 100/- per sqft over what agreed in Resolution Plan. This amount will be payable at the time of delivery of unit only as per specification in the Resolution Plan.
3.Delivery of units have to be made as per timelines in the approved Resolution Plan. In case if the delivery of units is delayed, then this escalation of Rs. 100/- per sqft shall not be payable.
4.There will not be any further escalation.
5.SRA will not further litigate for escalation upon acceptance e and communicate about acceptance in NCLAT.”
It is further averred in the affidavit that on 11.10.2023, while responding to the email dated 10.1.2023, the Appellant rejected the proposal which are contained in set-1 and accepted proposal No.2 which is reproduced hereunder:
“Proposal No.2
Meeting of SRA with Homebuyers’ Observers held on 20.12.2022
The Observers of allottes had informal meeting with SRA on the escalation clause on 20.12.2022 and the meeting did not result in any agreed settlement.
However, observers and many allottees after consultation and further negotiation with SRA have decided that a polling be done on the following points to find out the majority view, so that the same can be submitted to NCLAT in line of order dated 11.11.2022
1.Allottees are agreeable to a one time escalation cost of Rs. 192 per sqft over what agreed in Resolution Plan. This amount will be payable at the time of delivery of Unit only as per specification in Resolution Plan.
2.Delivery of units have to be made as per timelines in the approved Resolution Plan. In case if the delivery of units is delayed, then this escalation of Rs. 192 per sqft shall not be payable.
3.There will not be any further escalation.
4.SRA will not further litigate for escalation upon acceptance and communicate about acceptance in NCLAT”.
The proposal-2 accepted by the Appellant was then put to vote for which the voting started from 13.01.2023 at 11:00 AM upto 15.01.2023 till 7:00 PM.
It is further averred that the voting was conducted in terms of Section 25A (3A) of the Act and it was held as under:
It is pertinent to mention that the following order was passed on 13.02.2023:
“13.02.2023: Counsel for Respondent No.1 has submitted that an affidavit has been filed vide Diary No. 42946 dated 27.01.2023 for placing on record the decision taken by the ‘Class of Creditors’ by which they have approved the proposal of the Appellant for the escalation of the cost of construction to the extent of Rs. 192/- per square feet of the super area. However, keeping in view the fact that in this case, so far no notice has been issued to any of the Respondents, therefore, it would be in the interest of justice that a formal notice is issued to all the Respondents.
Issue Notice to all Respondents.
At this stage, Mr. Abhishek Anand, accepts notice on behalf of Respondent No.1. Notice to go through speed post to the other Respondents for which requisites and process fee must be filed within a week.
List this case on 13th April, 2023.”
As per office report, notice has been delivered to Respondent No.2 and 3 but no one appears on behalf of R3. Shri Amar Vivek is appearing on behalf of the R2 and supported the proposal submitted by the Appellant.
In view of the peculiar facts and circumstances of the present case, much less the fact that the escalation has been accepted by the homebuyers, the appeal is allowed and the matter is remanded back to the Adjudicating Authority to take a fresh decision as early as possible but not later than one month from the date of appearance of the parties before it. The parties are directed to appear before the Adjudicating Authority on 24.04.2023.