Resolution Profession obligated to include delayed claims of homebuyers included in Memorandum of Information
The Hon’ble National Company Law Appellate Tribunal in Puneet Kaur v. KV Developers 2022 SCC OnLine NCLAT 245 adjudicated on the issue whether Resolution Professional should have included the details of Homebuyers as reflected in the records of the Corporate Debtor in the Information Memorandum even though there was a delay in filing of claims before the Resolution Professional by homebuyers
Brief Facts
In pursuance of an ongoing insolvency resolution initiated by a corporate creditor (LIC Housing Finance) against K V Developers, and in subsequence of public notice of the CIRP, belated claims were filed by homebuyers to acquire inclusion within the resolution plan, but at that point in time resolution plan was approved by the CoC, upon dispute the adjudicating authority ordered the claims of the homebuyers being 8 months late, and the resolution plan already being approved by the CoC, though not by the adjudicating authority, as being extinguished. Appeal was preferred by the homebuyers, collectively heard by the tribunal.
Issues
Issue 1 – Whether approval of resolution plan extinguishes late claims of creditors?
Issue 2 – Whether there exists an obligation upon the Resolution Professional to include details of homebuyers in the Information Memorandum, given that no claim is filed by the homebuyers but information of such debt upon debtor by the homebuyers exist with the corporate debtor and consequently the Resolution Professional.
Held
Citing SC in Ghanshyam Mishra & Sons v. Edelweiss Asset Reconstruction, the tribunal held that as long as the resolution plan is not approved by the adjudicating authority, no claims stand extinguished, it is for the Adjudicating Authority to decide, but if the claim is made after the approval of resolution plan by the adjudicating authority, then such claim stands extinguished.
While reiterating the purpose of CIRP, the tribunal remarked that there is no reason for the names of homebuyers to be omitted from the Information Memorandum as creditors given that records of such debt are available with the corporate debtor. Furthermore, regulation 36 of IBBI obligates the resolution professional to include the relevant details of all assets and liabilities of the corporate debtor in the Information Memorandum.
Concluding Remarks of the Tribunal
Non-consideration of such late claims of homebuyers arising out of the fact that they had little chance of knowing about the insolvent debtor at a initial stage would amount to an inequitable and unfair resolution against the spirit of law.
This Article has been Compiled by Ayushi Misra (Senior Associate) and Arun Gupta (Partner).
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