20 Nov 2023 12:30 PM GMT
The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr Barun Mitra and Mr Arun Baroka (Technical Members) has dismissed an appeal and held that the doctrine of promissory estoppel cannot be applied against an approved Resolution Plan by the Committee of Creditors (“CoC”) under Insolvency and Bankruptcy...
The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr Barun Mitra and Mr Arun Baroka (Technical Members) has dismissed an appeal and held that the doctrine of promissory estoppel cannot be applied against an approved Resolution Plan by the Committee of Creditors (“CoC”) under Insolvency and Bankruptcy Code (“IBC”).
Sivana Reality Private Limited (“Corporate Debtor”) launched a Project known as ‘Samriddhi Garden’ at Bhandup, Mumbai. On 15.09.2017, LIC Housing Finance Limited (“LICHFL”) sanctioned a Term Loan Facility of Rs.130 crores to the Corporate Debtor. The Project of the Corporate Debtor ‘Samriddhi Garden’ was mortgaged to the LICHFL. In terms of the mortgage deed, any sale or third-party right could have been created by the Corporate Debtor only after the prior written consent/ No Objection Certificate (“NOC”) from LICHFL.
On 09.08.2018, Fervent Synergies Limited (“the Appellant”) and the Corporate Debtor entered into 10 separate Agreements for the sale of 10 flats in the Project being developed by the Corporate Debtor. On 11.08.2020, the Corporate Insolvency Resolution Process (“CIRP”) was initiated against the Corporate Debtor by an order passed by the National Company Law Tribunal (“NCLT”) and claims were invited by the Interim Resolution Professional (“IRP”).
The Appellant filed its claim with respect to 10 flats as per the Agreement to Sell dated 09.08.2018. On 13.09.2020 IRP, via email informed the Appellant that its claims has been admitted as a Financial Creditor.
On 03.06.2021, Resolution Professional (“RP”) via email, asked the Appellant to provide a NOC in respect of the 10 flats sold to it by the Corporate Debtor. RP on 17.06.2021, informed the Appellant that its claim has been rejected since NOC has not been obtained from LICHFL.
On 30.06.2021, the RP informed the Appellant that the claim of the Appellant has been restored as a Financial Creditor belonging to a class of creditors.
The Resolution Plan dealt with the Financial Creditors into two categories, i.e., affected homebuyers and unaffected homebuyers. Those homebuyers who have not obtained NOC from the LICHFL were treated as affected homebuyers and were dealt with differently in the Resolution Plan and those homebuyers, who have obtained NOC were treated differently.
The Appellant filed an application, raising objections to the Resolution Plan with the NCLT.
NCLT rejected the objection of the Appellant and observed that since the Resolution Plan has been approved by the Homebuyers as a class, the Appellent, who belongs to the class of Homebuyers, cannot individually object to the Resolution Plan.
Aggrieved by the said order, the Appellant an appeal with NCLAT.
Contentions of Appellant
The Appellant argued that the Resolution Plan discriminates between Homebuyers, who belong to one class of creditors and others. The Appellant further argues that such classification between affected and unaffected Homebuyers is erroneous and illegal.
The Appellant further argued that as the claim of the Appellant has been admitted and the Appellant has acted by the representation made by the Resolution Professional, the Respondents are bound by the principle of promissory estoppel and therefore cannot deny the claims which has already been admitted by the RP.
The Appellant further argued that fraud has been committed as the Appellant has been denied his rightful claim.
The Appellant pointed out that the Resolution Plan does not recognize the 10 flats sold to the Appellant on the ground that LICHFL has not given NOC in respect of the said flats.
The Appellant referred to the judgement of the Supreme Court in Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. – (1979) 2 SCC 409 and Manuelsons Hotels (P) Ltd. v. State of Kerala – (2016) 6 SCC 766.
Contentions of Respondents
The Respondents opposed the submissions of the Appellant and argued that the Homebuyers have been classified as affected and unaffected Homebuyers. The Appellant belongs to a class of creditors, who have approved the Resolution Plan and now cannot be allowed to question the Resolution Plan.
The Respondents further argued that the Resolution order has been approved by NCLT and the same has not been challenged by the Appellant. The Respondents further pointed out that the Resolution Plan is in consonance with the provisions of IBC.
NCLAT has dismissed the appeal and held that the doctrine of promissory estoppel cannot be applied against an approved Resolution Plan by the CoC.
“The mandatory contents of the Resolution Plan are laid down in the CIRP Regulations, 2016. If a Resolution Plan is compliant with the provision of Section 30, sub-section (2) of the IBC and the provisions of the Regulations, 2016, the Plan cannot be faulted on the ground of the promissory estoppel, which the Appellant is pressing against the Resolution Professional, who has admitted the claim.”
Case Title: Fervent Synergies Limited VS Manish Jaju
Case No.: Company Appeal (AT) (Insolvency) No.1338 of 2023
Counsel For Appellant: Mr. Arunava Mukherjee, Mr. Nisarg P. Khatri, Advocates.
Counsel For Respondents: Mr. Abhijeet Sinha, Mr. Dhaval Deshpande, Advocates for R-1. Mr Arun Kathpalia, Sr. Advocate with Mr Vishesh Kalra, and Mr Kunal Kanungo, Advocates for R-2. Ms. Anannya Ghosh, and Ms. Doel Bose, advocate for LICHFL.
Click Here To Read/Download Order