Case Note & Summary
The appeal was filed against an order from the National Company Law Tribunal (NCLT) which dismissed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC). The appellants, a group of 11 homebuyers, sought to challenge the discriminatory treatment in the resolution plan and demanded equal treatment with other homebuyers. They had entered into a Builder Buyer Agreement in 2007 but had not been allotted any specific flat or space. The NCLT found that the appellants constituted a minor percentage of the homebuyer class and were represented by an Authorized Representative. The NCLT cited the Supreme Court's ruling in Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd., which established that minority homebuyers cannot object to a resolution plan approved by a majority of the creditors. The Tribunal reiterated that the resolution plan had received 83.46% approval from the Committee of Creditors, thus dismissing the appeal and confirming the NCLT's order. The court emphasized the importance of majority voting in the resolution process to prevent liquidation and ensure the efficacy of the IBC. The appeal was ultimately dismissed, along with related interim applications.
Headnote
A) Insolvency Law - Resolution Plan Approval - Minority Homebuyers' Objections - Insolvency and Bankruptcy Code, 2016, Section 30(2) - The court held that a minority of homebuyers, represented by an Authorized Representative, cannot object to the resolution plan approved by a majority vote of the Committee of Creditors. The decision is binding on all members of the class, and allowing individual challenges would undermine the resolution process (Paras 5-7).
Issue of Consideration
Whether minority homebuyers can challenge the approved resolution plan under the Insolvency and Bankruptcy Code, 2016.
Final Decision
The appeal was dismissed, affirming the NCLT's order that minority homebuyers lack locus standi to challenge the resolution plan approved by a majority vote.
Law Points
- IBC compliance
- resolution plan approval
- minority objections
- authorized representative voting
- homebuyer rights
