# In the matter of Jaypee Greens Krescent Homes Buyers Welfare Association Vs Jaypee Infratech Ltd CA No.223-2018 and CA No. 266-2018 in CP No. (IB) 77-ALD-2017

> NCLT judgment dated 2019-06-04. Citation: TCN-2019-NCLT-03045. This case involves a reference to the National Company Law Tribunal (NCLT) concerning the…

- **Court:** NCLT
- **Order date:** 4 Jun 2019
- **Citation:** TCN-2019-NCLT-03045
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jaypee-greens-krescent-homes-buyers-welfare-association-vs-jaypee-infratech-ltd-864ce5e0

## Summary

### Background

This case involves a reference to the National Company Law Tribunal (NCLT) concerning the Corporate Insolvency Resolution Process (CIRP) of Jaypee Infratech Limited. The reference arises from a difference of opinion among the members of the Allahabad Bench of the NCLT regarding the interpretation of voting share requirements for the Committee of Creditors (CoC), particularly concerning home buyers as a class of financial creditors. The core issue revolves around whether the threshold voting share fixed for decisions of the CoC under various sections of the Insolvency and Bankruptcy Code (IBC) needs to be followed literally or whether they are only directory.

## Facts

Jaypee Infratech Limited is undergoing Corporate Insolvency Resolution Process (CIRP). A difference of opinion arose among members of the Allahabad NCLT bench regarding the interpretation of voting share requirements for the Committee of Creditors (CoC). The key issue is whether the threshold voting share fixed for CoC decisions under the IBC needs to be followed literally or is only directory. Home buyers constitute a significant portion of the CoC, holding 59.1% of the voting share as of February 2019, while lenders hold 40.8%. The Central Government and IBBI have also provided their views on the matter. Home buyers argue for class voting, where the majority within their class determines their collective vote. Lenders argue against class voting, stating that each

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## Issues and analysis

### Issue 1: Whether the Committee of Creditors (CoC) can be segmented class-wise for the purpose of computing …

**Ratio:** Section 21(2) of the IBC mandates that the CoC shall comprise all financial creditors of

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**Reasoning:** The tribunal reasoned that the IBC does not provide for segmentation of the CoC

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**Interpretation:** The interpretation emphasizes the unified nature of the CoC, where all

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**Application:** The ratio and reasoning apply to the specific facts by preventing home buyers

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## Parties

- **Judges:** R. VARADH…; Saroj Ra…; +1 more
- **Appellants:** Jaypee Greens…
- **Respondents:** Jaypee Infratech…; Jaypee Infratech…

## Timeline

- **2018-12-13 — Allahabad Ben…**: Allahabad Bench of NCLT issued an order expressing a difference of opinion among its…
- **2019-04-15 — Reference Ben…**: Reference Bench of the Tribunal delineated the question referred to it arising out of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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