The National Company Law Appellate Tribunal’s (NCLAT) New Delhi bench has ruled that a single homebuyer cannot contest the Resolution Plan’s approval and must accept the majority decision of the homebuyers. He must follow the majority’s decision or perish.
The ruling by which the Adjudicating Authority accepted the Corporate Debtor’s Resolution Plan was challenged in the appeals filed by the appellants, Jai Prakash Keswani (Promoter) and Harvinder Singh (Homebuyer). Additionally, the Promoter contested the Adjudicating Authority’s order in an I.A. in which the Appellant objected to the Resolution Plan.
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The Promoter’s counsel argued that the Resolution Plan is neither practical, realistic, or implementable. The proposal is conditional and contingent and should not have been accepted since it was argued that the timeframe for implementation—that is, turning over the units within nine months—was not feasible and that it was contingent upon receiving the occupancy certificate.
The homebuyer’s attorney argued that the plan is contingent and conditional. He made reference to Regulation 38 of the CIRP Regulations, 2016 and argued that, based on the plan’s contents, it lacks certain of the ingredients that Regulation 38 requires.
Additionally, the Promoter’s counsel argued that, although the order did not take into account the Appellant’s complaints, it was noted that the Appellant’s objections will be taken into account when evaluating the Resolution Plan approval application.
The Tribunal determined that the Resolution Plan adequately addressed the issue brought forward in the IA. It held that the issue of whether the plan can be implemented within nine months cannot be resolved at the time of plan approval. After the time frame outlined in the plan has passed, such a question may be brought up.
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The CoC should decide if the strategy is viable and feasible based on its commercial wisdom, according to the bench consisting of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member). With a 100% vote in favor of the proposal, the CoC was judged to have demonstrated the resolution plan’s practicality and feasibility.
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The Tribunal noted that the well-established Appellate Tribunal and the Adjudicating Authority have too little power to interfere with an order approving a Resolution Plan. As a result, the Tribunal declined to get involved in the Resolution Plan’s approval.
The Tribunal dismissed the appeal, ruling that the appellant, who is a homebuyer, must accept the majority decision of the homebuyers and cannot contest the approval of the plan, as established by the Supreme Court in the case of Jaypee Kensington Boulevard Apartments Welfare Association and Ors. Vs. NBCC (India) Limited & Ors. The Tribunal held that challenge to the Resolution Plan cannot be maintained on behalf of one lone homebuyer.
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