Belated Claims Of Homebuyers, If Reflected In The Records Of Corporate Debtor Shall Be Included In Information Memorandum By Resolution Professional: NCLAT

NCLAT was adjudicating the appeal filed by homebuyers of KV Developers (KVD) who either filed their claim after the stipulated time period or after the approval of the Resolution Plan by the Committee of Creditors (COC).

Brief Facts

LIC Housing Finance Limited filed an Insolvency Petition against KVD and the Corporate Insolvency Resolution Process of KVD was initiated by NCLT vide its order dated 28.10.2020. The Resolution Professional invited claims from creditors on or before 11.11.2020.

Resolution Plan submitted by a consortium of Sumit Kumar Khanna and Brij Krishore Trading Pvt. Ltd. (Successful Resolution Applicant/SRA) was put to e-voting from 13.07.2021 to 19.07.2021 and the same was approved by 100% voting by the COC on 20.07.2021 and thereafter, the Resolution Professional filed application before NCLT for approval of the Resolution Plan.

One of the Appellant Homebuyers filed its claim on 14.07.2021 (during voting on resolution plan) whereas three Appellant homebuyers filed their claim on 23.07.2021 (after the approval of Resolution Plan by COC) and one Appellant homebuyer filed its claim on 09.11.2021 (after filing of plan approval application before NCLT).

These Appellant homebuyers filed different interlocutory application before NCLT seeking direction to admit their claims but the same was rejected by NCLT on the ground that claims are filed after a gap of eight months and thus cannot be admitted and the also the COC had approved the Resolution Plan.

Contentions Of Appellant Homebuyers

It was contended on behalf of the Appellant Homebuyers that the thought the Homebuyers did not file their claims but the details of their allotment and payment already existed in the record of the Corporate Debtor and therefore, the Resolution Professional could have included the claims of these homebuyers in the Information Memorandum.

It was further contended that huge prejudice is caused to homebuyers due to non-inclusion of their claim in Information Memorandum and the Homebuyers shall be treated differently from Financial Creditors.

Contentions Of The Resolution Professional

It was contended on behalf of the Resolution Professional all the homebuyers have belatedly filed their claim and subsequent to the approval of the Resolution Plan by the COC. It was also contended that no error has been committed by the Resolution Professional as the claim were filed beyond the period of 90 days as prescribed under the code and furthermore, there is no obligation on the Resolution Professional to specifically informed the Homebuyers to file their claims apart from making publication.

Contentions of Successful Resolution Applicant

The SRA supported the submissions of Resolution Professional and further contended that the Resolution Plan is submitted as per the information memorandum and no new claim can be entertained after the approval of the Resolution Plan. It was also contended that the CIRP is a time bound process and the admission of belated claims will delay the CIRP.

Issues Framed By NCLAT

NCLAT framed two questions of law for its consideration that;

Whether the Resolution Professional was obliged to include the details of Homebuyers as reflected in the records of the Corporate Debtor in the Information Memorandum, even though they have not filed their claim before the Resolution Professional within time?

Whether Resolution Applicant ought to have also dealt with Resolution Plan regarding Homebuyers, whose names and claims are reflected in the record of the Corporate Debtor, although they have not filed any claim?

Decision/Analysis by NCLAT

NCLAT noted that the homebuyers have now been recognised as the Financial Creditors under the IBC and the amendment was brought to mitigate the misery of the homebuyers and to give them participation in the CIRP of a real estate company.

NCLAT further observed that due to the procedure prevalent regarding the filing of claims by the Financial Creditors, a large no. of homebuyers are unable to file their claims within time due to various genuine reasons.

The Bench ruled that all the documents pertaining to the homebuyers are on record of the Corporate Debtor and the Resolution Professional also takes charge of all the records of the Corporate Debtor.

"19…Even though, Interim Resolution Professional/Resolution Professional are not obliged to include the name of such Homebuyers, who have not filed the claim within the time in their List of Creditors, but there is no reason for not collating the claims of such Homebuyers whose claims are reflected from the records of the Corporate Debtor, including their payments and allotment."

NCLAT further held that Regulation 36(2) of the CIRP regulations obliges the Resolution Professional to include the details of Corporate Debtor regarding assets and liabilities.

"21…The liability towards those Homebuyers, who have not filed their claim exists and required to be included in the Information Memorandum…"

The Bench further held that the purpose of CIRP of the Corporate Debtor is to find out all liabilities of the Corporate Debtor and take steps towards resolution and unless all liabilities of the Corporate Debtor are not known or included in the information memorandum, no CIRP will be completed.

"Non-consideration of such claims, which are reflected from the record, leads to inequitable and unfair resolution as is seen in the present case."

NCLAT concluded that;

"23. We thus are of the considered opinion that Information Memorandum ought to have included the claim of those Homebuyers, who have not even filed their claims to correct liabilities of the Corporate Debtor for its appropriate resolution…"

NCLAT disposed off the appeal by directing the Resolution Professional to submit the details of homebuyers whose details are reflected in the record of the Corporate Debtor to the Successful Resolution Applicant and the SRA shall prepare an addendum to resolution plan which may be placed before the COC for consideration. Bench directed that this exercise to be completed within a period of three months.

Counsel for the Appellant : Mr. Mahesh Kumar and Ms. Simran Soni, Advocates.

Counsel for the Respondents: Mr. Abhinav Vasisht, Sr. Advocate with Mr. Rakesh Kumar Bajaj and Mr. Harish Taneja, Advocates for R-1 & 2., Mr. Nitin Kumar and Mr. Gagan Gulati, Advocate for R-3.Mr. Sumesh Dhawan and Ms. Vatsala Kak, Advocates for R-4. 

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