Clarification on calculation of voting shares of home buyers in committee of creditors of a corporate debtor
By INSOL India Editorial Team Posted On : July 15, 2019
The case of Jaypee Greens Krescent Homes Buyers Welfare Association vs. Jaypee Infratech Limited was referred by the Allahabad Bench of the National Company Law Tribunal to the Delhi Bench (reference bench) of the National Company Law Tribunal (“NCLT”) to decide whether the voting thresholds set out under the Insolvency and Bankruptcy Code, 2016 specially in relation to cases where home buyers are financial creditors are mandatory in nature.
In this regard, the Delhi Bench of the NCLT held as follows –
1. A committee of creditors shall comprise of all financial creditors and must be construed as one and cannot be classified as class wise particularly for the purpose of computation of voting share;
2. The voting thresholds as prescribed under the Insolvency and Bankruptcy Code, 2016 (“IBC”) are mandatory in nature and cannot be held to be directory; and
3. For computing the voting share required to be achieved as prescribed under the IBC, class wise voting of financial creditors, majority vote of a particular class, to be determined by adding the votes who had abstained, cannot be accepted.