Case Note & Summary
The case involved an application filed by the promoter of Sidhartha Buildhome Private Limited, seeking to have their revised proposal considered following a Supreme Court order. The Corporate Debtor was undergoing Corporate Insolvency Resolution Process (CIRP) initiated by Punjab National Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016. The promoter's previous proposals to withdraw from the CIRP had been rejected multiple times by the Committee of Creditors (CoC). The Supreme Court had directed the Appellate Tribunal to consider the promoter's revised proposal within three months. The Tribunal noted that the promoter's past proposals had been consistently rejected due to a lack of confidence from homebuyers and creditors, who cited ongoing criminal proceedings against the promoter and a history of non-compliance. The Tribunal also highlighted that the CoC had approved a Resolution Plan from Alpha Corp, which was pending before the NCLT. The promoter's proposal was deemed insufficient as it failed to inspire confidence among stakeholders, leading to its dismissal. The Tribunal emphasized the need for a credible plan that would protect the interests of homebuyers and creditors, ultimately rejecting the promoter's proposal for both the Estella and NCR Greens projects.
Headnote
A) Insolvency Law - Proposal Acceptance - Criteria for Acceptance of Proposals - Insolvency and Bankruptcy Code, 2016, Section 12A - The Tribunal found that the promoter's repeated proposals had been rejected multiple times by the Committee of Creditors, indicating a lack of confidence in the promoter's ability to fulfill obligations. The Tribunal held that the promoter's proposal could not be accepted due to insufficient trust from stakeholders (Paras 22-24). B) Corporate Governance - Role of Committee of Creditors - Insolvency and Bankruptcy Code, 2016, Section 29A - The Tribunal emphasized the importance of the Committee of Creditors' decisions in approving or rejecting proposals, highlighting that the promoter's past failures to deliver on commitments undermined their current proposal's credibility (Paras 8-10).
Issue of Consideration
Whether the revised proposal submitted by the promoter for the Corporate Debtor should be accepted.
Final Decision
The Tribunal dismissed the promoter's revised proposal, citing a lack of confidence from stakeholders and the repeated rejection of previous proposals by the Committee of Creditors. The Tribunal emphasized the need for a credible plan that would protect the interests of homebuyers and creditors.
Law Points
- Insolvency and Bankruptcy Code
- Corporate Debtor
- Resolution Plan
- Committee of Creditors
- Homebuyers' Rights
