Delve into the legal intricacies of a prominent home buyer dispute case where the court’s comprehensive legal analysis has brought to light crucial aspects of Resolution Plan approvals and moratorium provisions. The case delves into the rights of petitioners, especially in light of pending Resolution Plan approvals. Read on to understand the nuances of legal proceedings in this intriguing case.
Facts
- NCDRC allowed the claim of the petitioners on 12 July 2018, directing the first respondent to refund the principal amount with interest and costs.
- The first respondent challenged the NCDRC order in the Delhi High Court for the personal presence of the Managing Director.
- Resolution Plan submitted by a consortium of home buyers was approved by the Committee of Creditors with a high percentage of votes.
- An application for approval of the Resolution Plan is pending before the Adjudicating Authority.
- NCDRC issued further orders in execution proceedings on 1 April 2019.
- Settlements were reached with some petitioners, and disputes with others were in progress.
- Home buyer agreements were in place between the eleven petitioners and the first respondent.
- The Delhi High Court issued a notice to the petitioners.
- The court directed that no coercive steps should be taken against the Managing Director of the first respondent.
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Arguments
- Counsel for petitioners argue for attachment of personal properties of the promoters based on Resolution Plan stipulations.
- Petitioners claim settlements were made during court proceedings and promoters should be held personally liable to honor them.
- Reference to NCDRC order dated 1 April 2019 in relation to execution proceedings.
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Analysis
- The NCLT is directed to ensure expeditious disposal of the approval application within six weeks.
- The moratorium declared under Section 14 of the IBC applies only to the Corporate Debtor, not its directors/management.
- Petitioners retain the right to move against the promoters of the Corporate Debtor despite the moratorium.
- Proceedings under Section 138 and 141 of the Negotiable Instruments Act against the Corporate Debtor are covered by the moratorium provision under Section 14 of the IBC.
- Participation of petitioners in RP and CoC proceedings is noted.
- Consequences benefiting home buyers will ensue after the Resolution Plan is approved under Section 31(1) of the IBC.
- NCLT is specifically directed to dispose of the approval application within six weeks of receipt of a certified copy of the order.
- No new proceedings can be initiated or continued against the Corporate Debtor once the Resolution Plan is approved under Section 31(1) of the IBC.
- Section 14(1) of the IBC stipulates the moratorium provision.
- The Resolution Plan is pending approval by the Adjudicating Authority under Section 31(1) of the IBC.
- Petitioners are allowed to initiate proceedings against the promoters of the Corporate Debtor for honoring settlements reached before the court.
- The moratorium under Section 14 of the IBC does not prevent the petitioners from taking action against the promoters.
- Court cannot issue a direction based on a pending Resolution Plan before the Adjudicating Authority.
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Decision
- Pending applications have been disposed of
- Petitioners have liberty to pursue legal remedies after decision of Adjudicating Authority on the approval application under Section 31(1)
- SLP (C) No 12150 of 2019, SLP (C) Diary No 45043 of 2019, and Civil Appeal Nos 5231-5238 of 2019 are disposed of
Case Title: ANJALI RATHI Vs. TODAY HOMES AND IFRASTRUCTURE PRIVATE LIMITED (2021 INSC 460)
Case Number: SLP(C) No.-012150 / 2019
