20/10/2023

A hair-cut in Resolution Plan cannot be construed as being violative of Section 30(2)(e) of the IBC, the minority Homebuyers have to necessarily sail with the majority within the class – Mr. Ankur Narang & Ors. Vs. Mr. Nilesh Sharma RP of Today Homes and Infrastructure Pvt. Ltd. & Ors. – NCLAT New Delhi

The issue in this case is whether objections raised by a wafer-thin, miniscule minority amongst the homebuyers against the collective business decision taken by the Home Buyers can survive and be amenable to judicial intervention.

Hon’ble NCLAT held that:
(i) The democratic principles of a determinative role of majority opinion have been enshrined in the statutory construct of the IBC and hence the minority homebuyers have to necessarily sail with the majority within the class.

(ii) When the majority has approved the resolution plan, the objections raised by the homebuyers in minority are inconsequential.

(iii) Once the CoC has approved the resolution plan by requisite majority and the same is in consonance with applicable provisions of law the same cannot be a subject matter of judicial review and modification.

(iv) Merely because there is a reduction in the claim of any creditor does not make the resolution plan fall foul of law.

(v) Any clause in the resolution plan which requires creditors to take a hair-cut cannot be construed as being violative of Section 30(2)(e) of the IBC.

(vi) NCLAT quite agrees with the NCLT that “resolution plan providing a lesser amount than admitted does not make it illegal” and upheld the decision of the NCLT.

A hair-cut in Resolution Plan cannot be construed as being violative of Section 30(2)(e) of the IBC, the minority Homebuyers have to necessarily sail with the majority within the class – Mr. Ankur Narang & Ors. Vs. Mr. Nilesh Sharma RP of Today Homes and Infrastructure Pvt. Ltd. & Ors. – NCLAT New Delhi Read Post »

Scroll to Top