Krrish Realtech Private Limited vs Krrish Realtech Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021

[Arising out of Orders dated 21.10.2021, 09.11.2021 and 23.11.2021 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi (Court-II) in Company Petition No. IB-(PP)-02/ND/2021]

In the matter of:

Krrish Realtech Private Limited Basement, 1, Elegance Tower, Plot No.8, District Centre Jasola New Delhi- 110025 India E-mail: ak.mishra@thekrrishgroup.com ....Appellant

Vs.

For Appellant: Mr. Dushyant Dave, Senior Advocate and Mr. P. Nagesh, Sr. Advocate with Mr. Saurabh Kalia, Ms. Sheera Taqvi, Ms. Bina Gupta and Mr. Saurabh Gupta, Advocates.

For Objectors: Mr. Abhijeet Sinha, Mr. Sandeep Bajaj, Mr. Soaib Qureshi and Mr. Vipul Jai, Advocates. Mr. Ashish Aggarwal, Mr. Gurcharan Singh, Advocates (for Objector)

JUDGMENT

(21st December, 2021)

Ashok Bhushan, J.

1. This Appeal under Section 61 of the Insolvency and Bankruptcy Code,

2016 ("I&B Code" for short) has been filed challenging three orders dated

21.10.2021, 09.11.2021 and 23.11.2021 passed by the Adjudicating

Authority (National Company Law Tribunal), New Delhi (Court-II) in 2

Company Petition No. IB-(PP)-02/ND/2021. This Appeal raises a limited

issue as to whether the Adjudicating Authority while considering Application

of pre-packaged insolvency under Section 54C of the 'I&B Code' can, before

admission of the Application, hear Objectors/ Interveners. We need to notice

only necessary facts for deciding the above issue.

2. Appellant, the Corporate Debtor who claims to be under a debt of

Rs.673,16,36,869.63/-, instituted an Application for pre-packaged

insolvency resolution process under Section 54C of the 'I&B Code'. On

28.09.2021, the Corporate Debtor issued an e-mail addressed to its

stakeholders that the Company is intending to take recourse to pre-

packaged insolvency process in accordance with Chapter III-A of the 'I&B

Code'. The Corporate Debtor in the e-mail indicated that it shall be

appointing Resolution Professional. On 30.09.2021, the Corporate Debtor

issued an e-mail at 3.30 A.M. addressed to stakeholders issuing notice of the

meeting of Financial Creditors to be held by way of Video Conferencing on

30.09.2021 at 5.00 P.M. Another notice was issued on 02.10.2021 convening

a meeting for 03.10.2021 at 10.30 A.M. Company claimed that the

Resolution Professional was appointed and approval of Financial Creditors to

pre-packaged insolvency resolution process was also obtained on

30.09.2021. A report dated 05.10.2021 was submitted by Insolvency

Professional. On 08.10.2021, the Corporate Debtor filed an Application

before the Adjudicating Authority to initiate pre-packaged insolvency

resolution process under Section 54C. On 21.10.2021, the matter first came

up for hearing before the Adjudicating Authority on which date several

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 3

objectors appeared who opposed the Application. The Adjudicating Authority

granted one-week time to the objectors to file their objections. On

09.11.2021, an Application being I.A. 5140 of 2021 was filed by the

Objectors on which notice was issued on the Appellant.

3. On 23.11.2021, when the matter was again taken up by the

Adjudicating Authority, following order was passed:-

"Ld. Sr. Counsel for the Applicant is present. The application has been filed under Section 54(c) for the pre-packaged insolvency of the Applicant. Simultaneously, there are IAs filed by the various stakeholders objecting to the Application. These are IA- 5344/2021, 32/2021, 33/2021, 34/2021 & 35/2021. The Applicant is directed to file reply to each of these IAs alongwith a synopsis of the objection-wise reply within 2 weeks. Rejoinder, if any, be filed within 1 week thereafter. The Applicant is also directed to file replies to the objections already uploaded on the DMS.

Mr. Sandeep Bajaj, one of the Objectors shared an order dated 22nd November, 2021 of the Hon'ble High Court of Delhi. List the matter on 20th December, 2021."

4. Aggrieved by the aforesaid three orders, this Appeal has been filed.

5. We have heard Shri Dushyant Dave, Learned Senior Counsel

appearing for the Appellant and Shri Abhijeet Sinha and other Learned

Counsel appearing for the Objectors.

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 4

6. Shri Dushyant Dave, Learned Senior Counsel appearing for the

Appellant submits that with regard to an Application for pre-packaged

insolvency resolution process under Section 54C, the Adjudicating Authority

had no jurisdiction to grant any time to the objectors to file a reply. The

orders passed are without jurisdiction. He submits that as per the statutory

scheme, for considering a pre-packaged insolvency resolution process

Application, no opportunity is contemplated to any person including the

objectors/ Financial Creditors. It is submitted that pre-packaged insolvency

resolution process is to be completed in a time bound manner and the

scheme as delineated by Chapter III-A and the Insolvency and Bankruptcy

Board of India (Pre-packaged Insolvency Resolution Process) Regulations,

2021 does not contemplate giving any opportunity to the objectors to oppose

the Application prior to its admission. He submits that there is no provision

of any intervention. Learned Counsel for the Appellant has also placed

reliance on judgment of the Hon'ble Supreme Court in "Ebix Singapore Pvt.

Ltd. vs. Committee of Creditors of Educomp Solutions Limited and

Anr.- (2021) SCC OnLine SC 707" decided on 13.09.2021.

7. Learned Counsel appearing for the Objectors has opposed the

submission raised by Shri Dushyant Dave. It is submitted that the

Application for pre-packaged insolvency resolution process has been

initiated without complying the statutory provisions of the 'I&B Code'. It is

submitted that the Adjudicating Authority had every jurisdiction to grant

time to the objectors to show that the Application having not been filed in

compliance with the provisions of Section 54A, the same cannot be admitted

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 5

by the Adjudicating Authority. It is submitted that from the facts disclosed in

the Application itself, it is clear that the notice for convening meeting of

unrelated Financial Creditors was issued on 30.09.2021 itself by e-mail at

3.30 A.M. and the meeting was held at 5.00 P.M on the same day, whereas

statutory Regulations require atleast five days' notice, hence the meeting for

obtaining approval of unrelated Financial Creditors was not convened in

accordance with law. The whole process was adopted in hot haste to defeat

the rights of Financial Creditors i.e. Homebuyers. It is submitted that the

Application has been filed malafidely and fraudulently to defeat the rights of

Homebuyers who are Financial Creditors. It is submitted that from the

document filed alongwith Application, it is clear that many Financial

Creditors who have been treated as unrelated are actually related Financial

Creditors and they were not entitled to vote. It is further submitted that the

votes of several Financial Creditors/ Homebuyers have been wrongly

recorded as 'YES' whereas they opposed the proposal.

8. We have considered the submission of Learned Counsel for the parties

and perused the record.

9. Pre-packaged Insolvency Resolution Process has been brought in the

statute w.e.f. 9th April, 2021 by inserting Chapter III-A- 'Pre-packaged

Insolvency Resolution Process'. Insolvency and Bankruptcy Board of India

(Pre-Packaged Insolvency Resolution Process) Regulations, 2021 has been

framed. Section 54A deals with 'Corporate Debtors eligible for pre-packaged

insolvency resolution process'. Section 54A which is relevant to be

considered provided as follows:-

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 6

"54A. Corporate debtors eligible for pre-packaged insolvency resolution process.- (1) An application for initiating pre-packaged insolvency resolution process may be made in respect of a corporate debtor classified as a micro, small or medium enterprise under sub-section (1) of section 7 of the Micro, Small and Medium Enterprises Development Act, 2006. (2) Without prejudice to sub-section (1), an application for initiating pre-packaged insolvency resolution process may be made in respect of a corporate debtor, who commits a default referred to in section 4, subject to the following conditions, that--

(a) it has not undergone pre-packaged insolvency resolution process or completed corporate insolvency resolution process, as the case may be, during the period of three years preceding the initiation date;

(b) it is not undergoing a corporate insolvency resolution process;

(c) no order requiring it to be liquidated is passed under section 33;

(d) it is eligible to submit a resolution plan under section 29A;

(e) the financial creditors of the corporate debtor, not being its related parties, representing such number and such manner as may be specified, have proposed the name of the insolvency professional to be appointed as resolution professional for conducting the pre-packaged insolvency resolution process of the corporate debtor, and the financial creditors of the corporate debtor, not being its related parties, representing

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 7

not less than sixty-six per cent. in value of the financial debt due to such creditors, have approved such proposal in such form as may be specified:

Provided that where a corporate debtor does not have any financial creditors, not being its related parties, the proposal and approval under this clause shall be provided by such persons as may be specified;

(f) the majority of the directors or partners of the corporate debtor, as the case may be, have made a declaration, in such form as may be specified, stating, inter alia, --

(i) that the corporate debtor shall file an application for initiating pre-packaged insolvency resolution process within a definite time period not exceeding ninety days;

(ii) that the pre-packaged insolvency resolution process is not being initiated to defraud any person; and

(iii) the name of the insolvency professional proposed and approved to be appointed as resolution professional under clause (e);

(g) the members of the corporate debtor have passed a special resolution, or at least three-fourth of the total number of partners, as the case may be, of the corporate debtor have passed a resolution, approving the filing of an application for initiating pre-packaged insolvency resolution process.

(3) The corporate debtor shall obtain an approval from its financial creditors, not being its related parties, representing not less than sixty-six per cent. in value of the financial debt due to such creditors, for the filing

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 8

of an application for initiating pre-packaged insolvency resolution process, in such form as may be specified:

Provided that where a corporate debtor does not have any financial creditors, not being its related parties, the approval under this sub-section shall be provided by such persons as may be specified.

(4) Prior to seeking approval from financial creditors under sub-section (3), the corporate debtor shall provide such financial creditors with --

(a) the declaration referred to in clause (f) of subsection (2);

(b) the special resolution or resolution referred to in clause (g) of sub-section (2);

(c) a base resolution plan which conforms to the requirements referred to in section 54K, and such other conditions as may be specified; and

(d) such other information and documents as may be specified."

10. Section 54C which deals with 'application to initiate pre-packaged

insolvency resolution process' provides for:-

"54C. Application to initiate prepackaged insolvency resolution process.- (1) Where a corporate debtor meets the requirements of section 54A, a corporate applicant thereof may file an application with the Adjudicating Authority for initiating pre-packaged insolvency resolution process.

(2) The application under sub-section (1) shall be filed in such form, containing such particulars, in such manner and accompanied with such fee as may be prescribed.

(3) The corporate applicant shall, along with the application, furnish--

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 9

(a) the declaration, special resolution or resolution, as the case may be, and the approval of financial creditors for initiating pre-packaged insolvency resolution process in terms of section 54A;

(b) the name and written consent, in such form as may be specified, of the insolvency professional proposed to be appointed as resolution professional, as approved under clause (e) of sub-

section (2) of section 54A, and his report as referred to in clause (a) of sub-section (1) of section 54B;

(c) a declaration regarding the existence of any transactions of the corporate debtor that may be within the scope of provisions in respect of avoidance of transactions under Chapter III or fraudulent or wrongful trading under Chapter VI, in such form as may be specified;

(d) information relating to books of account of the corporate debtor and such other documents relating to such period as may be specified.

(4) The Adjudicating Authority shall, within a period of fourteen days of the receipt of the application, by an order,--

(a) admit the application, if it is complete; or

(b) reject the application, if it is incomplete:

Provided that the Adjudicating Authority shall, before rejecting an application, give notice to the applicant to rectify the defect in the application within seven days from the date of receipt of such notice from the Adjudicating Authority. (5) The pre-packaged insolvency resolution process shall commence from the date of admission of the application under clause (a) of sub-section (4)".

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 10

11. Section 54C (1) provides that where a Corporate Debtor meets the

requirements of Section 54A, a corporate applicant may file an application

with the Adjudicating Authority for initiating pre-packaged insolvency

resolution process. The requirements having been provided under Section

54A, a Corporate Debtor has to meet them to enable to initiate the process.

One of the relevant provisions in this regard is Section 54C (3) which

mandates that the Corporate Debtor shall obtain an approval from its

Financial Creditors, not being its related parties, representing not less than

sixty-six percent. in value of the financial debt due to such creditors, for the

filing of an Application. Regulation 14 under the heading "Initiation of

Process" deals with the manner in which approvals by Financial Creditors

have to be obtained. Regulation 14 is as follows:-

"14. Approvals by financial creditors. (1) For the purposes of clause (e) of sub-section (2) and sub- section (3) of section 54A, the applicant shall convene meetings of the financial creditors, who are not related parties of the corporate debtor.

(2) The notice of the meeting under sub-regulation (1) shall be served to the financial creditors, who are not related parties of the corporate debtor, at least five days before the date of the meeting, unless a shorter time is agreed to by all of them.

(3) The notice of the meeting under this regulation shall indicate the date, time and venue of the meeting, and enclose a list of creditors along with the amount due to them in Form P2.

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 11

(4) The financial creditors who are not related parties of the corporate debtor and have not less than ten per cent. of the value of the total financial debt of such creditors may propose names of insolvency professionals for the purposes of clause (e) of sub- section (2) of section 54A.

(5) The approval of the terms of appointment of resolution professional under clause (e) of sub-section (2) of section 54A shall be in Form P3.

(6) The terms of appointment of the resolution professional under this regulation shall include -

(a) fee payable to him for performing duties under sub-section (1) of section 54B;

(b) fee payable to him and expenses to be incurred by him for conducting the process; and

(c) fee payable to him and expenses to be incurred by him in case management of the corporate debtor is vested with him under section 54J.

(7) The approval for filing of application under sub- section (3) of section 54A shall be in Form P4.

(8) Where the corporate debtor has no financial debt or where all financial creditors are related parties, the applicant shall convene a meeting of operational creditors, who are not related parties of the corporate debtor and provisions of sub-regulations (1) to (7) shall mutatis mutandis apply."

12. The Scheme under Chapter III-A and the Regulations 2021 do not

contain any express provision either prohibiting the Adjudicating Authority

from hearing any of the objectors or interveners prior to the admission of

pre-packaged insolvency resolution process application or providing for

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 12

giving notice or hearing to the interveners or objectors. The objectors who

had filed applications were all Homebuyers who have purchased one or more

units in the Real Estate Projects of the Appellant. In the order dated

23.11.2021, extracted above, the Applications No. 5344/2021, 32/2021,

33/2021, 34/2021 & 35/2021 has been referred to. It is sufficient to notice

the contents of I.A 5344/2021 to find out the nature of objections raised

before the Adjudicating Authority. Application 5344/2021 was filed by

'Kelvin Buildcon Pvt. Ltd.' claiming to be unrelated Financial Creditor of

Appellant and allottee of 27 license plots against total consideration of

Rs.33,94,88,869/-. The substances of the objection raised by unrelated

Financial Creditors are:-

(i) Resolution Professional not appointed by the Unrelated Financial

Creditors as mandatorily required in law.

(ii) No mandatory notice of five days for meeting of unrelated Financial

Creditors as required in law.

(iii) Section 54C of the 'I&B Code' not complied with.

(iv) Constitution of the alleged list of unrelated Financial Creditors is

fraudulent and includes related creditors in order to override the

process of law.

13. Before proceeding any further we may observe that consideration of

submission of Learned Counsel for the Appellant as well as Learned Counsel

appearing for the Objectors/ Interveners is only for the object of deciding as

to whether Adjudicating Authority has jurisdiction to give time to the

objectors to file objection/ reply. We refrain ourselves from expressing any

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 13

opinion on the merits of the claim of the Objectors so as not to prejudice the

claim of either parties before the Adjudicating Authority before which the

Application for pre-packaged insolvency resolution process along with the

objections is still pending. We notice the nature of objections to only find out

as to whether the Adjudicating Authority exercised its discretion in giving

opportunity to the objectors to file objection in accordance with law or not.

14. Section 424 of the Companies Act, 2013 deals with the "procedure

before the Tribunal and Appellate Tribunal". Section 424(1) is as follows:-

"424. Procedure before Tribunal and Appellate Tribunal.-- (1) The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice, and, subject to the other provisions of this Act and of any rules made thereunder, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure........"

15. The legislative intent which is clear by Section 424 (1) is that the

Tribunal while disposing of any proceeding before it shall not be bound by

procedure laid down by Code of Civil Procedure but shall be guided by the

principle of natural justice and subject to the other provisions of this Act or

Code 2016 and any of the Rules made thereunder. Further, the Tribunal and

the Appellate Tribunal shall have power to regulate their own procedure. The

statutory scheme delineated by Chapter III-A of 'I&B Code' as well as the

Regulations, 2021 as observed above does not indicate any prohibition on

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 14

the Adjudicating Authority to hear any objector or intervener before

admitting an Application of pre-packaged insolvency resolution process.

When there is no prohibition in hearing an objector or interveners by the

Adjudicating Authority, the orders passed by the Adjudicating Authority

giving time to the objectors to file objection cannot be said to be in breach of

any statutory provisions. We may hasten to add that hearing of objectors or

interveners in each case where pre-packaged insolvency resolution process

application has been filed is not a matter of course and has to be limited to

exceptional cases. We are cautious that proceeding under the 'I&B Code' are

time bound procedure where unnecessary delay has to be avoided by the

Adjudicating Authority and giving time to objections which are meritless and

giving time to objectors and interveners has to be exercised on sound

discretion on valid grounds.

16. When we look into the provisions of Section 54A read with Section

54C, it is clear that certain statutory requirements have to be met before the

Corporate Debtor can file an Application. If an Application filed under

Section 54C does not meet the statutory requirements, it is always open for

a person, who has a claim in pre-packaged insolvency resolution process, to

point out that Application does not follow the statutory provisions. We have

noticed the substance of the objections made by one of the objectors above,

which indicate that it has been mentioned that certain Financial Creditors

have been treated to be unrelated and their votes have been counted for

finding out requisite majority who actually are related Financial Creditors.

There are other serious allegations which have been made in the objections

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 15

against the Corporate Debtor by so called unrelated Financial Creditors,

which we need not dwell any further since these are the matters which have

to be gone into and decided by the Adjudicating Authority.

17. We however, notice that in the Appeal itself filed by the Appellant in

the list of dates, 30.09.2021 is date given on which date the Board of

Directors of the Appellant by Board Resolution dated 30.09.2021 gave their

approval to initiate pre-packaged insolvency resolution process. Under

Section 54A, one of the requirements is that the Financial Creditors of the

Corporate Debtor not being related party have proposed the name of

Insolvency Resolution Professional and approved such proposal. The

Corporate Debtor has also to pass a Special Resolution, or atleast three-

fourth of the total number of partners, as the case may be, approving the

filing of an Application. The Corporate Debtor approved the Board Resolution

only on 30.09.2021 and on 30.09.2021 itself the meeting was held for of

Financial Creditors for approving the initiation of pre-packaged insolvency

resolution. It is the case of the objector that notice for the meeting dated

30.09.2021 which was scheduled to take place at 5.00 P.M. was issued only

at 3.30 A.M on the same date. We have noticed above that Regulations 14

required atleast five days' notice and shorter notice only when all have

agreed for shorter notice. There is no material to indicate that there was any

agreement with all Financial Creditors to hold the meeting on the same day

on which notice was issued. Prima facie there is breach of Regulation and no

valid meeting has been convened as per the own case of the Appellant

whether the claim of the Appellant is unrelated Financial Creditor has

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 16

approved the Resolution ought to be accepted without looking into any of the

claims of the Respondent is the question on which the Adjudicating

Authority has exercised its discretion and gave time to the objector to file

their objection. We are satisfied that there is no error in the exercise of

discretion by Adjudicating Authority in giving time to the objectors to file

their objection.

18. We have noticed that cardinal principle of procedure to be followed by

the Adjudicating Authority is the adherence of Rules of natural justice which

is statutorily provided for under Section 424 of the Companies Act, 2013.

The time given for objection to the objectors in the facts of the present case,

is in accordance with principle of natural justice which is to be followed by

the Adjudicating Authority. Further, there is no violation of any Regulations

or Rules or provisions of the 'I&B Code' in giving opportunity to objectors to

file their objection nor any such violation has been pointed out before us. It

is further relevant to notice that all the objectors who have filed different IAs

for objection are the persons who are included in list of unrelated Financial

Creditors as disclosed by the Appellant itself in his Application filed for pre-

packaged insolvency resolution process except few objectors who claimed

that although they are allottees but their names have not been shown in the

list. Some of the counsel appearing for the objectors have also submitted

that various homebuyers although objected to the Resolution but their votes

have been wrongly recorded as 'YES' in the Form P-4 filed alongwith

Application.

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 17

19. Shri Dushyant Dave Learned Senior Counsel placed reliance on

judgment of "Ebix Singapore Pvt. Ltd. vs. Committee of Creditors of

Educomp Solutions Limited and Anr.- (2021) SCC OnLine SC 707". The

Hon'ble Supreme Court in the above case had occasion to consider the object

and scheme underlying 'I&B Code'. The Hon'ble Supreme Court recorded its

conclusion in paragraphs 244 and 245 which are to the following effect:-

"244. The residual powers of the Adjudicating Authority under the IBC cannot be exercised to create procedural remedies which have substantive outcomes on the process of insolvency. The framework, as it stands, only enables withdrawals from the CIRP process by following the procedure detailed in Section 12A of the IBC and Regulation 30A of the CIRP Regulations and in the situations recognized in those provisions. Enabling withdrawals or modifications of the Resolution Plan at the behest of the successful Resolution Applicant, once it has been submitted to the Adjudicating Authority after due compliance with the procedural requirements and timelines, would create another tier of negotiations which will be wholly unregulated by the statute. Since the 330 days outer limit of the CIRP under Section 12(3) of the IBC, including judicial proceedings, can be extended only in exceptional circumstances, this open-ended process for further negotiations or a withdrawal, would have a deleterious impact on the Corporate Debtor, its creditors, and the economy at large as the liquidation value depletes with the passage of time. A failed negotiation for modification after submission, or a withdrawal after approval by the CoC and submission to the Adjudicating

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 18

Authority, irrespective of the content of the terms envisaged by the Resolution Plan, when unregulated by statutory timelines could occur after a lapse of time, as is the case in the present three appeals before us. Permitting such a course of action would either result in a down-graded resolution amount of the Corporate Debtor and/or a delayed liquidation with depreciated assets which frustrates the core aim of the IBC.

245. If the legislature in its wisdom, were to recognize the concept of withdrawals or modifications to a Resolution Plan after it has been submitted to the Adjudicating Authority, it must specifically provide for a tether under the IBC and/or the Regulations. This tether must be coupled with directions on narrowly defined grounds on which such actions are permissible and procedural directions, which may include the timelines in which they can be proposed, voting requirements and threshold for approval by the CoC (as the case may be). They must also contemplate at which stage the Corporate Debtor may be sent into liquidation by the Adjudicating Authority or otherwise, in the event of a failed negotiation for modification and/or withdrawal. These are matters for legislative policy."

20. The Apex Court in the above judgment has clearly laid down that

residual powers of the Adjudicating Authority under the IBC cannot be

exercised to create procedural remedies which have substantive outcomes on

the process of insolvency. Present is not a case where the Adjudicating

Authority has created any procedural remedies. We may further notice that

the observations made by the Hon'ble Supreme Court in the above case were

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 19

in reference to question as to whether Resolution Professional can withdraw

its Resolution after it having been approved by the CoC and submitted before

the Adjudicating Authority. The observation in paragraph 245 has been

made in the above reference. In the above judgment, there is no such ratio

laid down that the Adjudicating Authority cannot give time to the objectors

or interveners to bring certain materials on record which may have bearing

on deciding the question as to whether Application under Section 54C has

been filed after due compliance of the statutory requirements.

21. We, thus, are of the view that no error has been committed by the

Adjudicating Authority in giving opportunity to the objectors to file their

objections. The Appellant has also been given opportunity to file his rejoinder

and reply to the objections, hence he cannot claim that any prejudice is

cause to him only because objectors have been given time to file objection.

The objectors who have appeared before the Adjudicating Authority have

huge stakes since they are all homebuyers/ allottees and have paid

substantial amount to the Appellant running in lakhs and crores. No

exception can be taken to their anxiety to ensure that pre-packaged

insolvency resolution process is resorted in accordance with the procedure

prescribed in law. They have come up before the Court only to protect their

claims and point out the Court about the non-compliance of the statutory

provisions and it is for the Adjudicating Authority to consider the objections

and take decision on merit. Before we close, we reiterate our observations

that any observations made by us in this judgment are only for the purpose

of considering as to whether Adjudicating Authority has committed any error

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021 20

in granting time to the intervenors/ objectors to file objection. We make it

clear that we have not expressed any opinion on merits of the claim of any of

the objectors and it is for the Adjudicating Authority to consider and

ultimately take a decision as to whether Application under Section 54C

deserves to be admitted or rejected.

22. In view of the observations made above, we do not find any error in the

orders impugned in this Appeal. No error has been committed by the

Adjudicating Authority in granting time to objectors to file their objections

within a week. There is no merit in the Appeal. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Justice Jarat Kumar Jain] Member (Judicial)

[Dr. Alok Srivastava] Member (Technical)

New Delhi Anjali

Company Appeal (AT) (Insolvency) Nos. 1008, 1009 & 1010 of 2021