NCLT Bangalore Reiterates Individual Homebuyers Or Associates Cannot Challenge Resolution Plan, After Approval By CoC

The National Company Law Tribunal (“NCLT”), Bangalore Bench comprising of Justice (Retd) T. Krishnavalli (Judicial Member) and Shri. Manoj Kumar Dubey (Technical Member), dismissed an application filed under under Section 60(5)(a) of the Insolvency and Bankruptcy Code, 2016 (“Code”) in S. Viswanathan vs. Mr. Vinay Mruthyunjaya, Resolution Professional of Metrik Infraprojects Private Ltd. by S. Viswanathan (Homebuyer) to direct Mr. Vinay Mruthyunjaya, Resolution Professional (“RP”) for appointment of Authorized Representative for all the Homebuyers of Metrik Infraprojects Private Ltd. (Corporate Debtor) and to reconstitute the Committee of Creditors (“CoC”). The Tribunal reiterated that once a Resolution Plan is approved by the CoC with the consent of the homebuyers as a class, individual homebuyers or associations cannot challenge the plan or claim any legal grievances. Background Facts: The Homebuyer of the Real Estate Project of the Corporate Debtor raised concerns about the incomplete work in Towers A to F, noting that the resolution plan only covers Tower G. The outstanding work includes completing the structural aspects of these towers, installing amenities such as elevators, improving access areas, sewage treatment, electricity, water supply, public spaces, sports facilities, and green areas. The Financial Creditor Representative representing the group of homebuyers submitted that none of the homeowners have filed any claims throughout the Corporate Insolvency Resolution Process (CIRP) period. Further, the Homebuyer Applcaint should not be considered a "homebuyer" as defined in Section 5(8) of the Code. Once the Homebuyer receives possession of the flat, the value of the investment is received and they no longer constitute a financial creditor. Moreover, there is also a delay of 14 months in filing the application from the insolvency commencement date to the date of approval of the Resolution Plan by the CoC. The same has been filed after the conclusion of the CIRP process. NCLT Verdict: The NCLT Bangalore Bench dismissed the application and held that once a Resolution Plan is approved by the CoC with the consent of the homebuyers as a class, individual homebuyers or associations cannot challenge the plan or claim any legal grievances citing the Supreme Court’s decision in Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Vs. NBCC (India) Ltd. & Ors. The Tribunal noted that in the instant case, only one individual homebuyer has filed an application against the approval of the Resolution Plan, and their concerns are primarily related to the amenities in their specific block. Consequently, the homebuyer does not have a valid legal grievance. In conclusion, the Tribunal pointed out that since the application for the approval of the Resolution Plan had been granted on the same day through a separate order, the current application seeking the dismissal of the Resolution Plan is now irrelevant. Case Title: S. Viswanathan vs. Mr. Vinay Mruthyunjaya, Resolution Professional of Metrik Infraprojects Private Ltd. Case No.: I.A No.64/BB/2023 in CP (IB) No. 60/BB/2020 Counsel for Resolution Professional: Shri A.S Vishwajith, Advocate Click HereTo Read/Download Order

NCLT Bangalore Reiterates Individual Homebuyers Or Associates Cannot Challenge Resolution Plan, After Approval By CoC

Sachika Vij

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Sachika Vij

NCLT Bangalore Reiterates Individual Homebuyers Or Associates Cannot Challenge Resolution Plan, After Approval By CoC

Sachika Vij

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Sachika Vij

This is a premium content
Available exclusively to
Our subscribers