# JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION & ORS v. NBCC (INDIA) LTD. & ORS

- **Citation:** [2021] 12 S.C.R. 603
- **Court:** Supreme Court of India
- **Decided:** 2021-03-24
- **Case number:** Civil Appeal No. 3395 of 2020
- **Bench:** A. M. Khanwilkar, Dinesh Maheshwari, Sanjiv Khanna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jaypee-kensington-boulevard-apartments-welfare-association-ors-v-nbcc-india-ltd-35185
- **Pages:** 300

## Headnote

Insolvency and Bankruptcy Code, 2016 - ss. 30(2) and 31 -
Contours of the jurisdiction of Adjudicating Authority in dealing
with a resolution plan - Held: The Adjudicating Authority has limited
jurisdiction in the matter of approval of a resolution plan, which is
well-defined and circumscribed by ss.30(2) and 31 of the Code - In
the adjudicatory process concerning a resolution plan under IBC,
there is no scope for interference with the commercial aspects of
the decision of the Committee of Creditors (CoC); and there is no
scope for substituting any commercial term of the resolution plan
approved by Committee of Creditors - If, within its limited
jurisdiction, the Adjudicating Authority finds any shortcoming in
the resolution plan vis-à-vis the specified parameters, it would only
send the resolution plan back to the Committee of Creditors, for resubmission after satisfying the parameters delineated by the Code
and exposited by the Supreme Court.
Insolvency and Bankruptcy Code, 2016 - Resolution plan -
Activities of the corporate debtor had impact on a large number of
persons/ entities, including buyers of flats/apartments in its real
estate development projects - Whether approval of the resolution
plan of NBCC was vitiated because of simultaneous voting over
two resolution plans in the Committee of Creditors - Held: The
process of simultaneous voting over two plans for electing one of
them could not be faulted in the present case; and approval of the
resolution plan of NBCC was not vitiated because of simultaneous
consideration and voting over two resolution plans by the Committee
of Creditors.
Insolvency and Bankruptcy Code, 2016 - Resolution plan -
Activities of the corporate debtor had impact on a large number of
[2021] 12 S.C.R. 603
603
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persons/ entities, including buyers of flats/apartments in its real
estate development projects - Whether, after approval of the
resolution plan of NBCC by the Committee of Creditors, where
homebuyers as a class assented to the plan, any individual
homebuyer or any association of homebuyers could maintain a
challenge to the resolution plan and could be treated as a dissenting
financial creditor or an aggrieved person - Whether any housing
project which was completed or nearing completion ought to be
kept out of the purview of the resolution plan - Held: On facts, the
homebuyers as a class having assented to the resolution plan of
NBCC, any individual homebuyer or any association of homebuyers
cannot maintain a challenge to the resolution plan and cannot be
treated as a dissenting financial creditor or an aggrieved person;
and when the resolution plan comprehensively deals with all the
assets and liabilities of the corporate debtor, no housing project of
the corporate debtor could be segregated merely for the reason
that same was completed or nearing completion.
The instant matters essentially related to a resolution plan
in the corporate insolvency resolution process (CIRP) under the
Insolvency and Bankruptcy Code, 2016 concerning the corporate
debtor, Jaypee Infratech Limited (JIL), whose activities had
impact on a large number of persons/ entities, including buyers
of flats/apartments in its real estate development projects. CIRP
in relation to the corporate debtor JIL had been entangled in
various disputes in the past and even when the resolution plan
submitted by the resolution applicant, NBCC (India) Limited was
approved by the Committee of Creditors by a substantial majority
of 97.36% of voting share of the financial creditors, several
disputes/objections came up from various stakeholders and role
players, voicing the concerns of their own, like dissenting financial
creditors, dissatisfied homebuyers, displeased land providing
agency, disillusioned creditor of a wholly-owned subsidiary of the
corporate debtor and disappointed minority shareholders. Apart
from all these, the holding company of the corporate debtor,
namely, Jaip

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JAYPEE KENSINGTON BOULEVARD APARTMENTS
WELFARE ASSOCIATION & ORS.
v.
NBCC (INDIA) LTD. & ORS.
(Civil Appeal No. 3395 of 2020)
MARCH 24, 2021
[A. M. KHANWILKAR, DINESH MAHESHWARI AND
SANJIV KHANNA, JJ.]
Insolvency and Bankruptcy Code, 2016 - ss. 30(2) and 31 -
Contours of the jurisdiction of Adjudicating Authority in dealing
with a resolution plan - Held: The Adjudicating Authority has limited
jurisdiction in the matter of approval of a resolution plan, which is
well-defined and circumscribed by ss.30(2) and 31 of the Code - In
the adjudicatory process concerning a resolution plan under IBC,
there is no scope for interference with the commercial aspects of
the decision of the Committee of Creditors (CoC); and there is no
scope for substituting any commercial term of the resolution plan
approved by Committee of Creditors - If, within its limited
jurisdiction, the Adjudicating Authority finds any shortcoming in
the resolution plan vis-à-vis the specified parameters, it would only
send the resolution plan back to the Committee of Creditors, for resubmission after satisfying the parameters delineated by the Code
and exposited by the Supreme Court.
Insolvency and Bankruptcy Code, 2016 - Resolution plan -
Activities of the corporate debtor had impact on a large number of
persons/ entities, including buyers of flats/apartments in its real
estate development projects - Whether approval of the resolution
plan of NBCC was vitiated because of simultaneous voting over
two resolution plans in the Committee of Creditors - Held: The
process of simultaneous voting over two plans for electing one of
them could not be faulted in the present case; and approval of the
resolution plan of NBCC was not vitiated because of simultaneous
consideration and voting over two resolution plans by the Committee
of Creditors.
Insolvency and Bankruptcy Code, 2016 - Resolution plan -
Activities of the corporate debtor had impact on a large number of
[2021] 12 S.C.R. 603
603
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persons/ entities, including buyers of flats/apartments in its real
estate development projects - Whether, after approval of the
resolution plan of NBCC by the Committee of Creditors, where
homebuyers as a class assented to the plan, any individual
homebuyer or any association of homebuyers could maintain a
challenge to the resolution plan and could be treated as a dissenting
financial creditor or an aggrieved person - Whether any housing
project which was completed or nearing completion ought to be
kept out of the purview of the resolution plan - Held: On facts, the
homebuyers as a class having assented to the resolution plan of
NBCC, any individual homebuyer or any association of homebuyers
cannot maintain a challenge to the resolution plan and cannot be
treated as a dissenting financial creditor or an aggrieved person;
and when the resolution plan comprehensively deals with all the
assets and liabilities of the corporate debtor, no housing project of
the corporate debtor could be segregated merely for the reason
that same was completed or nearing completion.
The instant matters essentially related to a resolution plan
in the corporate insolvency resolution process (CIRP) under the
Insolvency and Bankruptcy Code, 2016 concerning the corporate
debtor, Jaypee Infratech Limited (JIL), whose activities had
impact on a large number of persons/ entities, including buyers
of flats/apartments in its real estate development projects. CIRP
in relation to the corporate debtor JIL had been entangled in
various disputes in the past and even when the resolution plan
submitted by the resolution applicant, NBCC (India) Limited was
approved by the Committee of Creditors by a substantial majority
of 97.36% of voting share of the financial creditors, several
disputes/objections came up from various stakeholders and role
players, voicing the concerns of their own, like dissenting financial
creditors, dissatisfied homebuyers, displeased land providing
agency, disillusioned creditor of a wholly-owned subsidiary of the
corporate debtor and disappointed minority shareholders. Apart
from all these, the holding company of the corporate debtor,
namely, Jaiprakash Associates Limited (JAL) and its
stakeholders had several questions over the resolution process
in question and were particularly concerned with the sum of INR
750 crores, which was deposited by JAL pursuant to the orders
passed by this Court in the first round of litigation. The principal
points calling for determination were:
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A. What is the extent of, and limitations over, the powers
and jurisdiction of the Adjudicating Authority while dealing with
the resolution plan approved by the Committee of Creditors?
B. As to whether approval of the resolution plan of NBCC
is vitiated because of simultaneous voting over two resolution
plans in the Committee of Creditors?
C.(i) As to whether the Adjudicating Authority erred in not
approving the stipulations in the resolution plan for meeting with
the contingent liability of additional amount of land acquisition
compensation; and has also erred in modifying these stipulations?
(ii) As to whether the Adjudicating Authority erred in not
approving the mechanism provided in the resolution plan for
transfer, of the concessionaire's rights and obligations under the
Concession Agreement with Yamuna Expressway Industrial
Development Authority (YEIDA), to the SPVs proposed to be
incorporated; and has also erred in modifying the relevant
stipulations? (iii) As to whether the Adjudicating Authority erred
in not approving the reliefs and concessions sought for in the
resolution plan in relation to YEIDA?
D. As to whether the Adjudicating Authority erred in not
approving the treatment of dissenting financial creditor like ICICI
Bank Limited in the resolution plan, as being not in accord with
Section 30(2)(b) of the Code read with Regulation 38(1)(b) of the
CIRP Regulations; and erred in modifying the terms of resolution
plan and in directing payment to the dissenting financial creditor
in monetary terms?
E. As to whether the Adjudicating Authority erred in
modifying the step provided in the resolution plan in regard to
the fixed deposit holders and in directing the resolution applicant
to make provision towards the dues of unclaimed fixed deposit
holders also?
F. (i) As to whether the resolution plan unauthorisedly
purports to deal with the assets of Jaypee Healthcare Limited
(JHL)? (ii) As to whether the Adjudicating Authority erred in
assuming that YES Bank Limited had agreed for constitution of a
committee to take forward the disinvestment process of Jaypee
Healthcare Limited?
JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE
ASSOCIATION v. NBCC (INDIA) LTD.
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G. As to whether the stipulation in the resolution plan for
cancellation of certain agreements/sub-leases is unfair and the
Adjudicating Authority erred in not modifying the same?
H. As to whether the minority shareholders are entitled to
state their claims/objections despite having not approached the
Adjudicating Authority; and as to whether the resolution plan
does not provide fair treatment to the minority shareholders?
I. (i) As to whether, after approval of the resolution plan of
NBCC by the Committee of Creditors, where homebuyers as a
class assented to the plan, any individual homebuyer or any
association of homebuyers could maintain a challenge to the
resolution plan and could be treated as a dissenting financial
creditor or an aggrieved person? (ii) As to whether the stipulations
in the resolution plan stand in violation of the provisions of the
Real Estate (Regulation and Development) Act, 2016? (iii) As to
whether the resolution plan is violative of the requirements of
CIRP Regulations? (iv) As to whether any housing project which
has been completed or is nearing completion ought to be kept
out of the purview of the resolution plan?
J. (i) As to whether the amount of INR 750 crores, which
was deposited by JAL pursuant to the orders passed by this Court
in the case of Chitra Sharma, and accrued interest thereupon, is
the property of JAL and stipulation in the resolution plan
concerning its usage by JIL or NBCC is impermissible? (ii) As
to whether any amount is receivable by JIL and/or its homebuyers
from JAL; and the accounts between JAL and JIL need
reconciliation?
K. (i) As to whether Clause 23 of Schedule 3 of the
resolution plan providing for extinguishment of security interest
of lenders of JAL could not have been approved by the
Adjudicating Authority? (ii) As to whether adequate provision is
required to be made in the resolution plan as regards utilisation
of the land bank of 758 acres, that has become available to JIL in
terms of the judgment dated 26.02.2020 by this Court?
L. What should be the appropriate orders on the other
issues raised by the resolution applicant seeking clarification/
directions?
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M. As to whether the Appellate Authority was justified in
providing for an Interim Monitoring Committee for
implementation of the resolution plan in question during the
pendency of appeals?
Disposing of the matters, the Court
HELD:
A. The Adjudicating Authority has limited jurisdiction in
the matter of approval of a resolution plan, which is well-defined
and circumscribed by Sections 30(2) and 31 of the Code. In the
adjudicatory process concerning a resolution plan under IBC,
there is no scope for interference with the commercial aspects of
the decision of the CoC; and there is no scope for substituting
any commercial term of the resolution plan approved by
Committee of Creditors. If, within its limited jurisdiction, the
Adjudicating Authority finds any shortcoming in the resolution
plan vis-à-vis the specified parameters, it would only send the
resolution plan back to the Committee of Creditors, for resubmission after satisfying the parameters delineated by the Code
and exposited by this Court.
B. The process of simultaneous voting over two plans for
electing one of them cannot be faulted in the present case; and
approval of the resolution plan of NBCC is not vitiated because
of simultaneous consideration and voting over two resolution
plans by the Committee of Creditors.
C. The stipulations in the resolution plan, as regards
dealings with YEIDA and with the terms of Concession Agreement,
have rightly not been approved by the Adjudicating Authority
but, for the stipulations which have not been approved, the only
correct course for the Adjudicating Authority was to send the
plan back to the Committee of Creditors for reconsideration.
D. The Adjudicating Authority had not erred in disapproving
the proposed treatment of dissenting financial creditor like ICICI
Bank Limited in the resolution plan; but erred in modifying the
related terms of the resolution plan and in not sending the matter
back to the Committee of Creditors for reconsideration.
E. The Adjudicating Authority erred in issuing directions
to the resolution applicant to make provision to clear the dues of
JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE
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unclaimed fixed deposit holders. Paragraph 125 of the impugned
order dated 03.03.2020 of the Adjudicating Authority (NCLT) is
set aside.
F. The issues related with the objections of YES Bank
Limited and pertaining to JHL, the subsidiary of the corporate
debtor JIL, are left for resolution by the parties concerned, who
will work out a viable solution in terms of paragraphs 141 and
142 of this judgment.
G. In the overall scheme of the resolution plan, the
stipulation in Clause 21 of Schedule 3 thereof cannot be said to
be unfair; and the observations in paragraphs 132 and 133 of the
order dated 03.03.2020 justly take care of the right of any
aggrieved party (agreement holder) to seek remedy in
accordance with law and ensures viability of the resolution plan.
H. It cannot be said that the resolution plan does not
adequately deal with the interests of minority shareholders. The
grievances as suggested by the minority shareholders cannot be
recognised as legal grievances. Their objections stand rejected.
I. The homebuyers as a class having assented to the
resolution plan of NBCC, any individual homebuyer or any
association of homebuyers cannot maintain a challenge to the
resolution plan and cannot be treated as a dissenting financial
creditor or an aggrieved person; the question of violation of the
provisions of the RERA does not arise; the resolution plan in
question is not violative of the mandatory requirements of the
CIRP Regulations; and when the resolution plan comprehensively
deals with all the assets and liabilities of the corporate debtor, no
housing project of the corporate debtor could be segregated
merely for the reason that same has been completed or is nearing
completion.
J. (i) The amount of INR 750 crores (which was deposited
by JAL pursuant to the orders passed by this Court in the case of
Chitra Sharma) and accrued interest thereupon, is the property
of JAL and stipulation in the resolution plan concerning its usage
by JIL or the resolution applicant cannot be approved. The part
of the order of NCLT placing this amount in the asset pool of JIL
is set aside. (ii) The question as to whether any amount is
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receivable by JIL and/or its homebuyers from JAL, against
advance towards construction and with reference to the admitted
liability to the tune of INR 195 crores as on 31.03.2020, shall be
determined by NCLT after reconciliation of accounts in terms of
the directions contained in paragraphs 189 to 191.1 of this
judgment. The amount, if found receivable by JIL, be made over
to JIL and the remaining amount together with accrued interest
be refunded to JAL in an appropriate account. The present matter
being related to CIRP of JIL, no other orders are passed in
relation to the amount that would be refunded to JAL because
treatment of the said amount in the asset pool of JAL shall remain
subject to such orders as may be passed by the competent
authority dealing with the affairs of JAL.
K. (i) Clause 23 of Schedule 3 of the resolution plan,
providing for extinguishment of security interest of the lenders
of JAL could not have been approved by the Adjudicating
Authority, particularly in relation to the security interest that
has not been discharged. This part of the order dated 03.03.2020
is set aside. (ii) Adequate provision is required to be made in the
resolution plan as regards utilisation of the land bank of 758 acres,
that has become available to JIL free from encumbrance, in terms
of the judgment dated 26.02.2020 of this Court in the case of
Anuj Jain.
L. (i) The impugned order dated 03.03.2020 of the
Adjudicating Authority (NCLT) shall be read as modified in
relation to Clause 7 of Schedule 3 of the resolution plan; and the
said clause shall stand approved. (ii) As regards possession/control
over the project sites/lands of JIL, it is left open for the resolution
applicant to take recourse to the appropriate proceedings in
accordance with law, whenever occasion so arise.
M. The Appellate Authority was not justified in providing
for an Interim Monitoring Committee for implementation of the
resolution plan in question during the pendency of appeals. The
impugned order dated 22.04.2020 passed by NCLAT is set aside.
[Para 216][893-F-H; 894-A-H; 895-A-H; 896-A-D]
2. Some of the terms and stipulations of the resolution plan
of NBCC, which was voted for approval by 97.36% of the voting
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share of the Committee of Creditors, do not meet with approval.
Although, barring such terms and stipulations, all other terms
and propositions of the resolution plan stand approved. To be
specific, the terms and stipulations in the resolution plan which
do not meet with approval are those concerning: (a) the land
providing agency [as held in Point C]; (b) the dissenting financial
creditor [as held in Point D]; (c) the undischarged security interest
of the lender of JAL [as held in Point K (i)]. [Para 217][896-D-F]
3. The decision of the Adjudicating Authority in relation to
the said amount of INR 750 crores with accrued interest has been
disapproved. This amount is the property of JAL and the
stipulations in the resolution plan concerning its usage by JIL or
the resolution applicant cannot be approved [as held in Point J
(i) (supra)]. However, the final treatment of the said amount of
INR 750 crores with accrued interest shall be determined by
NCLT after the reconciliation of accounts between JAL and JIL
and in terms of the directions contained in this judgment. [Para
217.1][896-F-G]
4. Adequate provision is required to be made by the
resolution applicant for utilisation of the land bank of 758 acres
on which, security interest of the lenders of JAL stands
discharged in terms of the judgment of this Court in Anuj Jain.
[Para 217.2][896-H; 897-A]
5. The matters aforesaid, one way or the other, relate to
the commercial terms of the resolution plan and carry their own
financial implications. [Para 217.3][897-A-B]
6. When several shortcomings are found in the resolution
plan approved by the Committee of Creditors vis-à-vis the
specified parameters, the plan cannot be approved and the matter
is required to be sent back to the Committee of Creditors. But
the course to be adopted in the present matter carries its own
share of complications. [Para 218][897-B-C]
7. In this matter twice over in the past, this Court had to
invoke its plenary powers under Article 142 of the Constitution
of India, so that the insolvency resolution process concerning
JIL could be taken to its logical fruition but within the discipline
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of IBC. Having regard to the circumstances, this Court had
provided windows for completion of CIRP while essentially
discounting on the time spent in the course of litigations. [Para
219][897-D]
8. In the judgment dated 09.08.2018 in Chitra Sharma, this
Court revived the CIRP after taking note of the peculiarities of
the case and later amendment to IBC whereby, the doubts about
the status of homebuyers were removed and they were duly
accorded the recognition as financial creditors. Then, in the
judgment dated 06.11.2019 in Jaiprakash Associates Ltd., this
Court provided another period of 90 days for completion of the
CIRP from the date of judgment, after observing that delay in
completion of CIRP was attributable to the process of law and
neither the homebuyers nor any other financial creditor was to
be blamed for pendency of the proceedings. This Court also
observed that extraordinary situation had arisen because of
constant experimentation at different levels due to lack of clarity
on the matters crucial to the decision making process of CoC
and besides, there had been further legislative changes whereby,
the scope of resolution plan was expanded. This Court also took
note of the fact that there was unanimity amongst all the parties
appearing before the Court that liquidation of JIL must be
eschewed and an attempt be made to salvage the situation by
finding out some viable arrangement which could subserve the
interests of all concerned. The Court further took into account
the third proviso to Section 12(3) of the Code whereby, another
period of 90 days was provided in relation to the pending
insolvency resolution process. All these factors led this Court to
issue directions under Article 142 of the Constitution of India for
the second time in this matter, to do substantial and complete
justice to the parties and in the interest of all the stakeholders.
[Para 220][897-E-H; 898-A-B]
9. It appears that the resolution applicant, as also a large
number of homebuyers of JIL having substantial voting share in
CoC, carried a misplaced notion that the said amount of INR 750
crores and accrued interest has become an asset of JIL. At the
same time, it appears that there had been lack of clarity as regards
the treatment of contingent liability of the additional amount of
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compensation. The lack of clarity percolated in the decision of
the Adjudicating Authority too, where it was assumed by the
Adjudicating Authority that some of the questionable terms/
stipulations of the resolution plan could be modified/ modulated
by it. [Para 221][898-C-D]
10. The consequence and impact of the judgment of this
Court in Anuj Jain dated 26.02.2020 was also not properly taken
in comprehension by the Adjudicating Authority and, it was
assumed by the Adjudicating Authority in its order dated
03.03.2020 that the entire '858' acres of land stood discharged
from the burden of security. Although the so-called correction of
errors was carried out by the Adjudicating Authority on
17.03.2020 and the figure was corrected to '758' acres but the
consequences of such a material correction were not examined.
[Para 221.1][898-E]
11. Nevertheless, encumbrance over 758 acres of land
(which is said to be carrying a valuation of over INR 5000 crores)
is removed; and availability of the said land parcel has a substantial
impact on the position of assets and liquidity of the corporate
debtor JIL. [Para 221.1][898-F]
12. The entire substratum of the corporate insolvency
resolution concerning JIL has undergone a sea of change. The
added features in the continuing processes had been that JAL
asserts to have carried out several works to reduce its liability
towards JIL and on the other hand, IRP has asserted to have
carried out further construction works and having made Offers
of Possession to several homebuyers. [Para 222][898-G-H]
13. Taking all the facts and circumstances into account and
in keeping with the spirit and purport of the orders passed in the
past, this Court is inclined to again exercise the powers under
Article 142 of the Constitution of India and to enlarge the time
for completion of CIRP concerning JIL while extending
opportunity to the said resolution applicants Suraksha Realty and
NBCC to submit modified/fresh resolution plans, which are
compliant with the requirements of the Code and the CIRP
Regulations and are in accord with the observations and findings
in this judgment. [Para 223][899-A-B]
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14.1. Accordingly, while once again exercising powers under
Article 142 of the Constitution to do substantial and complete
justice to the parties and in the interest of all the stakeholders of
JIL, the matter regarding approval of the resolution plan stands
remitted to the Committee of Creditors of JIL and the time for
completion of the process relating to CIRP of JIL is extended by
another period of 45 days from the date of this judgment. [Para
225.1][900-B]
14.2. The IRP is directed to complete the CIRP within the
extended time of 45 days. For this purpose, it will be open to the
IRP to invite modified/fresh resolution plans only from Suraksha
Realty and NBCC respectively, giving them time to submit the
same within 2 weeks from the date of this judgment. [Para
225.2][900-C]
14.3. The IRP shall not entertain any expression of interest
by any other person nor shall be required to issue any new
information memorandum. The said resolution applicants shall
be expected to proceed on the basis of the information
memorandum already issued by IRP and shall also take into
account the facts noticed and findings recorded in this judgment.
[Para 225.3][900-D]
14.4. After receiving the
resolution plans as
aforementioned, the IRP shall take all further steps in the manner
that the processes of voting by the Committee of Creditors and
his submission of report to the Adjudicating Authority (NCLT)
are accomplished in all respects within the extended period of
45 days from the date of this judgment. The Adjudicating Authority
shall take final decision in terms of Section 31 of the Code
expeditiously upon submission of report by the IRP. [Para
225.4][900-E-F]
14.5. These directions, particularly for enlargement of time
to complete the process of CIRP, are being issued in exceptional
circumstances of the present case and shall not be treated as a
precedent. [Para 225.5][901-A]
K. Sashidhar v. Indian Overseas Bank and Ors. (2019)
12 SCC 150: [2019] 3 SCR 845; Committee of
Creditors of Essar Steel India Limited v. Satish Kumar
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Gupta and Ors.: (2020) 8 SCC 531: [2019]16 SCR 275;
Maharashtra Seamless Limited v. Padmanabhan
Venkatesh and Ors. (2020) 11 SCC 467 and India
Thermal Power Ltd. v. State of M.P. and Ors. (2000) 3
SCC 379 : [2000] 1 SCR 925 - relied on.
Chitra Sharma and Ors. v. Union of India and Ors.
(2018) 18 SCC 575 : [2018] 12 SCR 1044; Jaiprakash
Associates Limited and Anr. v. IDBI Bank Ltd. and Anr.
(2020) 3 SCC 328; Anuj Jain, Interim Resolution
Professional for Jaypee Infratech Limited v. Axis Bank
Limited Etc. Etc., (2020) 8 SCC 401; Pioneer Urban
Land and Infrastructure Ltd. & Anr. v. Union of India
& Ors. (2019) 8 SCC 416 : [2019] 10 SCR 381;
Embassy Property Development Pvt. Ltd. v. State of
Karnataka and Ors. (2019) SCC OnLine SC 1542;
Swiss Ribbons Private Limited and Anr. v. Union of India
and Ors. (2019) 4 SCC 17 : [2019] 3 SCR 535; Savitri
Devi v. State of U.P. & Ors. (2015) 7 SCC 21 : [2015] 7
 SCR 512; Kerala State Electricity Board and Anr. v.
Kurien E. Kalathil and Ors. (2000) 6 SCC 293 : [2000]
1 Suppl. SCR 581; Municipal Corporation of Greater
Mumbai (MCGM) v. Abhilash Lal and Ors. (2019) SCC
OnLine SC 1479; Nand Kishore Gupta & Ors. v. State
of U.P. & Ors. (2010) 10 SCC 282 : [2010] 11
 SCR 356; Himachal Pradesh Housing and Urban
Development Authority and Anr. v. Ranjit Singh Rana
(2012) 4 SCC 505 : [2012] 2 SCR 427; Commissioner
of Income Tax, Madhya Pradesh & Bhopal v. Shrimati
Sodra Devi AIR 1957 SC 832 : [1958] SCR 1; Kolkata
Metropolitan Development Authority v. Gobinda
Chandra Makal and Anr. (2011) 9 SCC 207 : [2011]
14 SCR 373; Indian Handicrafts Emporium and Ors.
v. Union of India and Ors. (2003) 7 SCC 589 : [2003]
3 Suppl. SCR 43; CIT, Bangalore v. Venkateswara
Hatcheries (P) Ltd. (1999) 3 SCC 632 : [1999] 2 SCR
177 and Union of India v. Sankalchand Himatlal Sheth
and Anr. (1977) 4 SCC 193 : [1978] 1 SCR 423; State
through Central Bureau of Investigation v.
Parmeshwaran Subramani and Anr. (2009) 9 SCC 729
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615
: [2009] 14 SCR 385; Rathi Khandsari Udyog and Ors.
v. State of Uttar Pradesh and Ors. (1985) 2 SCC 485
: [1985] 2 SCR 966; Dadi Jagannadham v. Jammulu
Ramulu and Ors. (2001) 7 SCC 71 : [2001] 2 Suppl.
SCR 60; Vodafone International Holdings BV v. Union
of India and Anr. (2012) 6 SCC 613 : [2012] 1
 SCR 573; Wg. Cdr. Arifur Rahman Khan & Ors. v. DLF
Southern Homes Pvt. Ltd. & Ors. (2020) SCC OnLine
SC 667; ONGC and Anr. v. Association of Natural Gas
Consuming Industries and Ors. (2001) 6 SCC 627 :
[2001] 1 Suppl. SCR 50 and South Eastern Coalfields
Ltd. v. State of M.P. & Ors. (2003) 8 SCC 648 : [2003]
4 Suppl. SCR 651 - referred to.
Pradumna Kumar Jain v. U.P. Secondary Education
Service Commission, Allahabad and Ors. (1997) 30
ALR 339; Gajraj and Ors. v. State of U.P. and Ors.
(2011) SCC OnLine All 1711 - referred to.
Samuel Katkin and Doris Katkin v. Commissioner of
Internal Revenue 570 F.2d 139 [Decision of the Court
of Appeal for the 6th Circuit, USA]; White v. Elmdene
Estates Ltd. 1959 ALL ER 605 - referred to.
Case Law Reference
[2018] 12 SCR 1044
referred to
Para 4.2
(2020) 3 SCC 328
referred to
Para 4.3
(2020) 8 SCC 401
referred to
Para 4.4
(2020) 11 SCC 467
relied on
Para 45
[2019] 10 SCR 381
referred to
Para 45
[2019] 3 SCR 535
referred to
Para 63.2
[2019] 3 SCR 845
relied on
Para 63.2
[2019] 16 SCR 275
relied on
Para 63.2
[2015] 7 SCR 512
referred to
Para 88
[2000] 1 SCR 925
relied on
Para 95.1
[2000] 1 Suppl. SCR 581
referred to
Para 95.1
JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE
ASSOCIATION v. NBCC (INDIA) LTD.
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[2021] 12 S.C.R.
[2010] 11 SCR 356
referred to
Para 99.5
[2012] 2 SCR 427
referred to
Para 113.2.1
[1958] SCR 1
referred to
Para 113.2.3
[2011] 14 SCR 373
referred to
Para 113.2.3
[2003] 3 Suppl. SCR 43
referred to
Para 113.2.3
[1999] 2 SCR 177
referred to
Para 113.2.3
[1978] 1 SCR 423
referred to
Para 113.2.3
[2009] 14 SCR 385
referred to
Para 113.2.4
[1985] 2 SCR 966
referred to
Para 114.3
[2001] 2 Suppl. SCR 60
referred to
Para 115
[2012] 1 SCR 573
referred to
Para 139
[2001] 1 Suppl. SCR 50
referred to
Para 178.4
[2003] 4 Suppl. SCR 651
referred to
Para 186
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3395
of 2020.
From the Judgment and Order dated 22.04.2020 of the National
Company Law Appellate Tribunal, New Delhi in Company Appeal(AT)
(Insolvency) No. 475 of 2020.
With
Civil Appeal No. 3396 of 2020, T.C (C) Nos. 234, 235, 236, 237,
238, 239, 240, 241, 242, 243 Of 2020, Civil Appeal No. 1056 of 2021,
Civil Appeal No. 1057 of 2021 and Diary No. 20274 of 2020.
Tushar Mehta, SG., Dhruv Mehta, Gopal Sankarnarayanan, Jaideep
Gupta, Huzefa Ahmadi, Arvind P. Datar, Anupam Lal Das, Krishnan
Venugopal, Shyam Divan, Neeraj Kishan Kaul, Ravindra Shrivastava,
Abhishek Manu Singhvi, Ritin Rai, Sidharth Luthra, R. Balasubramanian,
Sr. Advs., Prateek Kumar, Siddharth Srivastava, Mohit Kishore,
Ms. Raveena Rai, Anubhav Ray, Snehal Kakrania, Sahil Narang,
Bishwajit Dubey, Uday Khare, Shatrajit Banerji, Sumit Attri, M/S. Cyril
Amarchand Mangaldas, Kunal Chatterji, Ms. Maitrayee Banerjee, Pravar
Veer Mishra, Amit Kumar Mishra, Shashank Manish, Ms. Manasi
Chatpalliwar, Ms. Smriti Shah, Ms. Twinkle Kataria, Ms. Nidhi Sahay,
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Shivam Pandey, Buddy A. Ranganadhan, Raunak Jain, Hasan Murtaza,
Vishal Gupta, Sumeet Sharma, Divyanshu Gupta, Zinnea Mehta, Paras
Choudhary, Ms. Misha, Nikhil Mathur, Ms. Shreya Prakash, S.S. Shroff,
P. Nagesh, Ms. Soumya Dutta, Anshuman Shrivastava, Abhijeet
Shrivastava, Ms. Garima Tiwari, Ms. Harneet Khanuja, Arpit Jain,
B. Ramana Murthy, Anush Raajan, Ms. Ashima Chauhan, Ms. Mansi
Gupta, Punit Dutt Tyagi, Raghavendra M. Bajaj, Ms. Garima Bajaj, Joel,
Amit Dwivedi, Saifi Sham, Amar Gupta, Divyam Agarwal, Ashish Joshi,
Ms. Pallavi Kumar, Sumant Batra, Sanjay Bhatt, Rabin Majumder,
Ms. Niharika Sharma, Ms. Akansha Srivastava, Sachin Sharma, Rohan
Jaitely, Tanvir Nayar, Akshay Sharma, Ram Lal Roy, Himanshu Shekhar,
Jamnesh Kumar, L.K. Bhushan, Mohit Sharma, M/S. Dua Associates,
Ms. Revaty Raghvan, Shariq Ahmed, Tariq Ahmed, Ms. Prashi Tyagi,
Sunil Kumar Verma, Amit Pawan, Advocates for the appearing Parties.
The Judgment of the Court was delivered by
DINESH MAHESHWARI, J.
Introductory
1. Permission to file special leave petition(s) and leave granted in
respective Petition(s) for Special Leave to Appeal.
2. This batch of civil appeals, special appeals and transfer cases
essentially relate to the resolution plan1 in the corporate insolvency
resolution process2 under the Insolvency and Bankruptcy Code, 20163
concerning the corporate debtor, Jaypee Infratech Limited4, whose
activities do impact a large number of persons/entities, including the buyers
of flats/apartments5 in its real estate development projects.
2.1. As shall be noticed hereafter, CIRP in relation to the corporate
debtor JIL has been entangled in various disputes in the past and even
when the resolution plan submitted by the resolution applicant, NBCC
(India) Limited6 has been approved by the Committee of Creditors7 by a
substantial majority of 97.36% of voting share of the financial creditors,
1 Hereinafter, at some places, it has also been referred to as 'the plan'.
2 'CIRP' for short.
3 Hereinafter also referred to as 'the Code' or 'IBC'.
4 Hereinafter also referred to as 'JIL'.
5 Hereinafter generally referred to as 'the homebuyers'.
6 Hereinafter also referred to as 'NBCC'.
7 'CoC' for short.
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several disputes/objections have come up from various stakeholders and
role players, voicing the concerns of their own, like dissenting financial
creditors, dissatisfied homebuyers, displeased land providing agency,
disillusioned creditor of a wholly-owned subsidiary of the corporate debtor
and disappointed minority shareholders. Apart from all these, the holding
company of the corporate debtor, namely, Jaiprakash Associates Limited8
and its stakeholders have several questions over the resolution process
in question and are particularly concerned with the sum of INR 750
crores, which was deposited by JAL pursuant to the orders passed by
this Court in the first round of litigation.
3. Looking to a multiload of issues arising from variegated
propositions/objections put forward by different parties, it appears
appropriate to draw a brief outline and sketch of the matter at the outset.
Brief outline and sketch
4. The cases involved in this batch have got assimilated in this
Court in the following circumstances:
4.1. The corporate insolvency resolution process in relation to the
corporate debtor JIL got initiated on 09.08.2017 when the National
Company Law Tribunal9, Allahabad Bench admitted the petition filed by
one of the financial creditors, IDBI Bank Limited, under Section 7 of the
Code. However, when the Interim Resolution Professional10 invited claims
in this CIRP, the treatment of homebuyers became an issue contentious,
because they were treated only as 'other creditors', not at par with
financial and operational creditors.
4.2. The aforesaid position led to the proceedings in this Court,
which were dealt with in a batch of petitions led by Writ Petition (Civil)
No. 744 of 2017: Chitra Sharma and Ors. v. Union of India and
Ors.11 wherein, several orders were passed by this Court from time to
time, inter alia, with directions to JAL, the holding company of JIL, for
making deposits in the Court, particularly looking to the claim of refund
being made by some of the homebuyers. While finally disposing of the
8 Hereinafter also referred to as 'JAL'.
9 Hereinafter also referred to as 'the Adjudicating Authority' or 'NCLT'. As shall be
noticed, the matter before the Allahabad Bench was later on transferred to the New
Delhi Bench of the Tribunal. These expressions 'the Tribunal' or 'NCLT' or 'the
Adjudicating Authority' refer to the said transferee Bench too, as per the given context.
10 'IRP' for short.
11 Final judgment therein has since been reported as (2018) 18 SCC 575.
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matters on 09.08.2018, this Court took note of several factors, including
the nature of projects, interests of a large number of homebuyers and
unanimity amongst all the concerned that liquidation of the corporate
debtor shall not be in the interest of any stakeholder. This Court also
took note of the fact that even the statutorily extended period for
concluding the CIRP was over but, there had been a relevant supervening
event where, by way of an Amendment Ordinance that came into force
on 06.06.2018, the doubts about the status of homebuyers were removed
and they were expressly recognised as financial creditors. Having regard
to the facts and circumstances, this Court issued a slew of directions for
ensuring complete justice in the cause, while exercising its powers under
Article 142 of the Constitution of India, by providing for further extended
period for conclusion of CIRP; for constitution of CoC afresh; and
permitting the IRP to invite fresh expressions of interest for the submission
of resolution plans. This Court also provided that the amount of INR 750
crores, 'which has been deposited in this Court by JAL/JIL shall
together with the interest accrued thereon' be transferred to NCLT,
which would abide by the directions as may be issued by NCLT.
4.3. While the proceedings thus restored by this Court were
pending, further question cropped up as to the manner of reckoning the
voting percentage of homebuyers in CoC. Two members of NCLT
differed in their opinion and the matter was referred to the third member.
In the meantime, IDBI Bank sought exclusion, of the period of pendency
of the application for such clarification as to the voting percentage, from
the period of 270 days for completion of CIRP. While this application
was pending, NCLT called upon the concerned parties to file reply on
the necessity to proceed further with the CIRP, for considering the
resolution plan received from the bidder, subject to the outcome of the
pending application. The orders passed by NCLT in relation to these
aspects were challenged before the National Company Law Appellate
Tribunal, New Delhi12. The Appellate Authority, by its judgment dated
30.07.2019, provided for exclusion of 90 days for the purpose of counting
the total period of 270 days and disposed of the appeals with some more
observations. This gave rise to further appeals in this Court, led by Civil
Appeal No. 8437 of 2019 [@ D No. 27229 of 2019]: Jaiprakash
Associates Limited and Anr. v. IDBI Bank Ltd. and Anr.13, which
12 Hereinafter also referred to as 'the Appellate Authority' or 'NCLAT'.
13 Final judgment therein has since been reported as (2020) 3 SCC 328.
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were decided on 06.11.2019. Therein, this Court found that delay in
completion of CIRP was attributable to the process of law and neither
the homebuyers nor any other financial creditor was to be blamed for
pendency of the proceedings; and under the plenary powers, this Court
passed yet further orders so as to ensure that an attempt was made for
revival of the corporate debtor by submission of revised resolution plans.
4.4. Running parallel to the proceedings noticed hereinabove, there
had been another set of proceedings involving two issues: one, relating
to an application filed by IRP before the Adjudicating Authority seeking
orders for avoidance of the certain transactions, whereby several parcels
of land were put under mortgage with the lenders of JAL, the holding
company of JIL; and second, involving the claim of two of the lender
banks of JAL to be included in the category of financial creditors of JIL.
These two aspects eventually came up for adjudication of this Court in
another batch of appeals led by Civil Appeal Nos. 8512-8527 of 2019:
Anuj Jain, Interim Resolution Professional for Jaypee Infratech
Limited v. Axis Bank Limited etc. etc., which were decided on
26.02.202014. This Court held that six out of seven transactions in question
were preferential within the meaning of Section 43 of the Code and the
directions by NCLT for avoidance of such transactions were upheld.
On the second issue, this Court held that the applicant banks were not
the financial creditors of the corporate debtor JIL and the respective
orders passed in that regard by NCLT were restored.
4.5. We shall be dilating on the relevant attributes of the aforesaid
previous rounds of litigation at the appropriate stage and juncture hereafter.
Suffice it to notice for the purpose of brief outline that the resolution
plans submitted by two applicants were put to vote of the Committee of
Creditors and finally, the resolution plan submitted by NBCC (India)
Limited was approved by the CoC on 17.12.2019, by a vast majority of
over 97% of voting share of the financial creditors. Thereafter, on
19.12.2019, the Interim Resolution Professional moved an application
before the National Company Law Tribunal, Allahabad Bench, being
C.A. No. 5 of 2020 in CP (IB) No.