Delhi High Court Issues Notice On Plea Challenging 'Present and Voting' Framework Under IBC

A bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia directed the respondents, the Union of India through the Ministry of Corporate Affairs, the Insolvency and Bankruptcy Board of India, interim resolution professional Umesh Singhal, authorised representative Rajiv Malik, and Claim Bridge Technologies Pvt. Ltd., to file their counter affidavits within four weeks, with rejoinder, if any, to be filed thereafter.

The matter has been listed for further hearing on May 26.

The petition specifically assails Section 25A(3A) of the Code, which governs voting by authorised representatives of a class of creditors, including homebuyers.

Explaining the grievance, the petition states that “the voting share of the class of creditors comprising Homebuyers is computed on the basis of 'present and voting,' instead of being determined with reference to the total voting share meeting a statutory threshold.”

It further contends that the placement of the phrase “who have cast their vote” results in a situation where the threshold is effectively lowered and “in essence reduces the threshold by a big margin.”

The plea has been filed in the context of insolvency proceedings relating to the Supertech Township project, where the petitioners are part of the class of financial creditors represented through an authorised representative.

According to the petitioners, the impugned framework results in arbitrary classification and improper discrimination in the voting mechanism, inasmuch as the voting share of a class of creditors is determined on the basis of the 'present and voting' principle, whereas for other categories of creditors, the prescribed statutory threshold is computed irrespective of abstentions.

They contend that the mechanism effectively allows outcomes to be determined by a limited subset of participating voters, pointing out that only those who have “actually voted (i.e., 'present and voting')” are counted for the purpose of determining the majority.

The petition also raises concerns regarding transparency, stating that there is no statutory requirement for the authorised representative to disclose detailed voting data or breakdowns to individual homebuyers. This, the petitioners argue, renders the process opaque and undermines informed participation in decision-making.

For Petitioners: Senior Advocate Vivek Kohli with Advocates Paras Mithal, Prakhar Mithal, Arjun Katyal

For Respondents: CGSC Sandeep Kumar Mehpatra, Shashank Bajpai, with Advocates Mrinmayee Sahu, Tribhuvan, Anushka Saraj, Aashna Mehra, Vatsal Tripathi, Govind Singh Chauhan, Vishal Ganda, Chhavi Jain, Ravi Arya, Anshul Sharma