A reference bench of the National Company Law Tribunal (NCLT) on Thursday held that homebuyers in the Jaypee Infratech case should be considered a part of the committee of creditors (CoC) and “must be construed as one and cannot be segmented class wise, particularly for the purpose of computation of voting share”.

The reference bench was formed on the instructions of the Chairperson of NCLT, Justice M M Kumar, after two judges of the Allahabad Bench of NCLT gave differing views on voting rights of financial creditors in the CoC meetings of Jaypee Infratech. While one of the members held that all creditors, including home buyers, should be considered together, the other member was of the view that homebuyers should be treated as a different class.

Jaypee Infratech homebuyers have a 58.1 per cent voting share of the total debt to the debt given by the corporate debtors, while lenders have a 41.8 per cent voting share. Apart from the withdrawal of the insolvency plea, which requires a 90 per cent approval of the CoC, most of the major resolutions brought under the corporate insolvency resolution process require 66 per cent voting in favour of the resolution to be passed.

The principal bench of NCLT, apart from referring the mattter to a third member, Justice R Varadharajan, had also sought the central government's and the Insolvency and Bankruptcy Board of India’s (IBBI) view. The IBBI has suggested that the resolution professional take a vote of only those committe members, who were present and voting.

“The board states that the stakeholder who with adequate notice and opportunity to participate, does not do so, should be deemed to have given his or her assent to the other stakeholder to decide on the matter at hand. This presumption is necessary to prevent decisions being stalled as a result of non-participation,” the IBBI said in its submission to the NCLT.

The central government, too, has followed the principle of ‘present and voting’, and said that the preferred approach should be resolution of Jaypee Infratech, rather than its liquidation.

Apart from one of the resolutions brought in by the resolution professional in the Jaypee Infratech insolvency case, 9 out of the 10 resolutions have been rejected as none of them got the required votes to be passed due to a poor response from the homebuyers as compared to the en-masse participation by the lenders.

To solve the deadlock, the resolution professional decided that only the votes actually cast would be considered and the voters who had abstained would be disregarded. The homebuyers’ associations had, however, opposed the proposal arguing that it would defeat the purpose of including home buyers as financial creditors.

After the decision of the reference bench of NCLT, the matter will now be sent back to the chairperson for his perusal, following which it can be announced in NCLT Allahabad, Justice Varadharajan said in his order.