Status as on- 02/02/2023
Case- ‘Puneet Kaur v KV Developers and Ors.’ Company Appeal (AT) (Insolvency) No. 390 of 2022)
Facts of the Case:
The Adjudicating Authority’s Order was the subject of an appeal (NCLT, New Delhi).
The Adjudicating Authority noted that the claims of the homebuyers had been made eight months after the last date on which the claim had been submitted, and as a result, the claims could not be admitted. It was also mentioned that the resolution plan had previously received approval from the Committee of Creditors (CoC).
The following issues were raised in the matter:
- If the Homebuyers hadn’t submitted their claim to the Resolution Professional in a timely manner, was the Resolution Professional still required to include their information as it appeared in the Corporate Debtor’s records in the Information Memorandum?
- Is it necessary for the Resolution Applicant to have dealt with the Resolution Plan for Homebuyers, whose names and claims are listed in the Corporate Debtor’s records even though they haven’t submitted any claims?
Contentions of Parties:
Even though the appellants were unable to register their claims within the allotted time, the appellants’ counsel submitted that the Corporate Debtor’s records already contained information on their allocation and payments that they had made. It was further argued that the Resolution Professional had a responsibility to alert the Appellants to the need to file their claims and that, in the event that the financial creditors were unable to do so, the Resolution Professional could have included their claims as liabilities to the Corporate Debtor in the Information Memorandum created in accordance with Regulation 36 of the Corporate Insolvency Resolution Process (CIRP) Regulations.
According to Respondent’s Counsel, Appellants failed to file their claims by the deadline and did not do so until after the 90-day period allowed by Section 12 of the Insolvency and Bankruptcy Code, 2016, hence, the Resolution Professional did not commit any wrong by not accepting the claims of the Appellants to add their names in ‘List of Creditors’.
Ruling and Conclusion:
First, Coram stated that the real estate business must give possession of the homes/unit and other related responsibilities when the allocation letters are issued to the Homebuyers in exchange for the money made.
Moreover, the Coram stated that the Information Memorandum must indicate the liability towards Homebuyers who have not yet submitted their claim. Such arguments may not be taken into account in the information memoranda, which could result in unfair and inequitable resolutions.
As a result, the Coram instructed the resolution professional to give the resolution applicant the information about homebuyers that is listed in the corporate debtor’s records, including their claims, so that the resolution applicant could use that information to create an addendum to the resolution plan that could be presented to the CoC for consideration.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at ibc@centrik.in.
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