Insolvency and Bankruptcy Code, 2016: s.14 – Petitioners are home buyers in a group housing project – Possession of apartments were not handed as per the agreement – Petitioners filed consumer complaint before National Commission (NCDRC) – NCDRC directed refund of money with interest – Execution proceedings – First respondent challenged the order of NCDRC before High Court and stay was granted in favour of first respondent – Pending execution, proceedings were initiated against the first respondent before NCLT by operational creditor – Adjudicating Authority admitted s.9 petition following which the corporate insolvency resolution process was initiated and a moratorium was declared under s.14 of the IBC – This order of NCLT resulted in filing of special leave petition by certain other homebuyers with grievance that application filed for initiation of corporate insolvency against the first respondent was merely to stall the refund of the amount due to the homebuyers in terms of order of NCDRC – Petitioners lodged their claims before the Resolution Professional – CoC approved the Resolution Plan which was submitted by the consortium of homebuyers – Application was filed by the Resolution Professional for approval of the Resolution Plan before the Adjudicatory Authority and some objections were received – The proceedings are now pending before the Adjudicating Authority, awaiting its approval under s.31(1) of the IBC – If the petitioners have any objections to the Resolution Plan, they are to submit them before the Adjudicating Authority – NCLT is directed to ensure that the application for approval is disposed of expeditiously – Since the Resolution Plan is still to be approved by the Adjudicating Authority under the provisions of s.31(1) of the IBC, at this stage, it is held not appropriate to issue a direction to attach personal properties of the promoters – After the Resolution Plan is approved under the provisions of s.31(1), consequences emanating from the statutory provision would ensue to the benefit of the home buyers – Further, since the moratorium declared in respect of the first respondent continues to operate under s.14 of the IBC, no new proceedings can be undertaken or pending ones continued against the Corporate Debtor – Petitioners would not be prevented by the moratorium under s.14 of the IBC from initiating proceedings against the promoters of the first respondent in relation to honoring the settlements reached before this Court – However, this Court cannot issue such a direction relying on a Resolution Plan which is still pending for approval before an Adjudicating Authority.
Disposing of the special leave petitions and appeal, the Court
HELD: 1. The conspectus of facts before this Court reveals that the petitioners have participated in the proceedings before the RP and later, the CoC. The Resolution Plan which has been submitted by the consortium of home buyers stands approved by the CoC and the proceedings are now pending before the Adjudicating Authority, awaiting its approval under Section 31(1) of the IBC. If the petitioners have any objections to the Resolution Plan, they are to submit them before the Adjudicating Authority. The NCLT is directed to ensure that the application for approval is disposed of expeditiously and preferably within a period of six weeks form the date of receipt of a certified copy of this order.[Para 12][159-G-H; 160-A]
2. The petitioners urged that this Court should at the present stage direct that the personal properties of the promoters be attached in view of the provisions contained in the Resolution Plan which have been extracted earlier. The Resolution Plan is still to be approved by the Adjudicating Authority under the provisions of Section 31(1) of the IBC. Hence, at this stage, when the Resolution Plan awaits approval, it would not be appropriate for this Court to issue a direction of that nature. After the Resolution Plan is approved under the provisions of Section 31(1), consequences emanating from the statutory provision would ensue to the benefit of the home buyers. Further, since the moratorium declared in respect of the first respondent Corporate Debtor continues to operate under Section 14 of the IBC, no new proceedings can be undertaken or pending ones continued against the Corporate Debtor.[Paras 13, 14][160-A-D]
P. Mohanraj v. Shah Bros. Ispat (P) Ltd. (2021) 6 SCC
258 – relied on.
3. The petitioners would not be prevented by the moratorium under Section 14 of the IBC from initiating proceedings against the promoters of the first respondent Corporate Debtor in relation to honoring the settlements reached before this Court. However, this Court cannot issue such a direction relying on a Resolution Plan which is still pending for approval before an Adjudicating Authority. [Para 15][162-B-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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