Jaypee Infratech Case : Publication Of Homebuyers' Names In List Of Creditors Will Not Violate Privacy, Rules NCLT [Read Order]
The Allahabad bench of National Company Law Tribunal has held that disclosure of the names of homebuyers in the list of creditors will not result in violation of privacy.
The Tribunal was dealing with the resolution process of Jaypee Infratech Ltd(JIL), following directions from the Supreme Court. The SC had directed on August 9 to include homebuyers in the Committee of Creditors(CoC), and directed the Tribunal to conclude the proceedings.
Following this, the Interim Resolution Professional(IRP) moved an application seeking to dispense with the disclosure of names of the homebuyers. While displaying the details of allottees of real estate project of JIL on the website, IRP mentioned the unique code number assigned to the allottees instead of giving their names. According to the IRP, the investment in flats or plots of land by allottee is information private to the allottees and displaying their names and other personal details without their consent may amount to breach of privacy of any allottee.
However, this plea was opposed by IDBI bank and other lenders, who initiated the insolvency process against JIL. It was pointed out that Regulation 13(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016(CIRP Regulations) mandated disclosure of the names of the creditors. The SC had directed the IRP to act in accordance with the provisions of the Insolvency & Bankruptcy Code(IBC). They also stated that seeking exemption from publication of names gave rise to apprehension that some of the home buyers may not be genuine.
The Tribunal noted that IRP had no case that any request was received from any homebuyer regarding withholding of identity. Even several homebuyers in the CoC are opposing the request of IRP. Hence, the request was termed as baseless as per the order passed on December 10.
Further, the Tribunal noted that each home buyer has got a voting share depending upon his claim amount verified by the IRP. Therefore, what are the claims verified in respect of each home buyer must be made known to the other claimants also.
"The object of directing the JRP to publish the list of the creditors containing the names of the creditors along with the amount claimed by them, is to maintain transparency in respect of their claims and to determine their voting share. Therefore, such an information must be made available not only to the members of CoC and to the other creditors who are not members of the CoC and to the whole world. That is why the Regulation 1 3(2) enjoins on the IRP to publish the list of creditors containing the names of the creditors along with the amount claimed by them on the website of the Corporate Debtor", held the bench comprising B Raveendra Babu(Judicial Member) and Saroj Rajware(Expert Member)
The Tribunal also rejected the argument of IRP that publication of names will infringe right to privacy declared by SC in Puttaswami judgment, holding "publication of their names in the list of creditors is not going to affect their privacy or fundamental right, especially when they became part of Committee of Creditors that mainly take part in taking various crucial and vital decisions as part of CIRP process in respect of Corporate Debtor"
It was in August 2017 that insolvency proceedings were initiated against JIL, which was declared by the RBI to be in default of about Rs.8000 crores. Later, a group of nearly 646 home allottees moved the SC contending that insolvency process will not protect their interests and sought stay of proceedings. The Court granted stay, observing that homebuyers will get nothing out of insolvency proceedings. The promoters of JIL were directed to deposit an amount of Rs.750 crores in SC as condition for stay.
Later, the IBC was amended by Parliament in monsoon session, permitting homebuyers to be treated as financial creditors and to be included in the CoC. In the light of this fact, the SC remanded the matter to NCLT, directing homebuyers to be included in the CoC. The SC also directed the amount of Rs.750 crores to be transferred to NCLT account. The request by for allotment of this amount to homebuyers was turned down by the SC, holding that such preferential allotment to a particular class of creditors was impermissible.
Only 9,000 home buyers out of around 24,000 home buyers attended the COC meeting and exercised voting rights, noticed the NCLT in the order passed on December 10.
In the CIRP of Jaypee Infratech Limited, the nine associations of the home buyers are being led by Mr. Anand Grover, Sr. Counsel briefed by P&A Law Offices, through a team comprising of Amit K. Mishra and Ketan Mukhija, Partners along with Gaurav Priyadarshi, Senior Associate and Shivam Pandey, Associate. The IRP is being assisted by Kessar Das B. Associates and the consortium of lenders is being represented by Cyril Amarchand Mangaldas.Read Order