CASE – Puneet Kaur v.

KV Developers
[2022] 140 taxmann.com 500 (NCLAT – New Delhi)

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.

Issue 1 – Whether approval of resolution plan extinguishes late claims of creditors?

 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.

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.

 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.