Lone Homebuyer Can't Challenge Approval Of Resolution Plan: NCLAT

Brief Facts

The Appellants, Jai Prakash Keswani (Promoter) and Harvinder Singh (Homebuyer) filed the appeals challenging the order by which the Adjudicating Authority approved the Resolution Plan of the Corporate Debtor. The Promoter also challenged the order passed by the Adjudicating Authority in an I.A. by which objections were raised by the Appellant to the Resolution Plan.

Submissions

Counsel for the Promoter submitted that the Resolution Plan is not implementable and is not viable and feasible. It was submitted that the time for implementation of the plan i.e. handing over of units within 9 months was not possible and it is subject to receipt of Occupancy Certificate; hence, the plan is conditional and contingent and ought not to have been approved.

Counsel for the Homebuyer submitted that the plan is conditional and contingent. He referred to Regulation 38 of the CIRP Regulations, 2016 and submitted that the plan does not contain necessary ingredients which are required under Regulation 38, as indicated from contents of the plan.

Counsel for the Promoter also submitted that while rejecting IA filed by the Appellant raising objections, it was observed that the objections of the Appellant shall be considered while considering the Resolution Plan approval application whereas in the order, there was no consideration.

Observations

The Tribunal held that the objection raised in the IA was held to be properly addressed in the Resolution Plan. It held that the question that the Plan is not implementable within 9 months is not an issue which can be decided at the time of approval of the plan. Such a question can be raised after expiry of the period contemplated in the plan.

The Tribunal held that it is the commercial wisdom of the CoC to take a decision on viability and feasibility of the plan. The CoC having approved the plan with 100% voting, deemed to have adverted to the viability and feasibility of the Resolution Plan.

The Tribunal observed that the scope of interference in an order approving Resolution Plan is too limited for the Adjudicating Authority and the Appellate Tribunal which is well settled. The Tribunal relied upon Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta & Ors. The Tribunal thus refused to interfere in the order approving the Resolution Plan.

The Tribunal further held that Appellant who is one of the homebuyers has to go with the majority decision of the homebuyers and cannot be allowed to question the approval of the plan which is law settled by the Supreme Court in 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.

The Tribunal dismissed the appeals.

Case Title: Jai Prakash Keswani vs. MB Malls Pvt. Ltd & Ors

Case Number: Company Appeal (AT) (Insolvency) No. 92 & 93 of 2025 & I.A. No. 294, 295, 378, 379 of 2025

Order Date: 21.02.2025