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The Allahabad Bench of the NCLT has held that publication of names of homebuyers in the list of creditors will not amount to a violation of their right to privacy.
The ruling came in response to an application filed by the Resolution Professional (RP) of Jaypee Infratech. The RP sought an exemption from application of Regulation 13(2) of the IBBI(CIRP) Regulations which requires that the list of creditors displayed on the website of the corporate debtor. He claimed this exemption in view of the recent Supreme Court judgment in the case of KS Puttaswamy where it was held that right to privacy is an intrinsic part of the right to life and personal liberty under Article 21. In this regard, the argument was that informational privacy is a facet of right to privacy. However, from the record, it is clear that none of the homebuyers ever made any assertions that the RP refrain from disclosing their names of the website. In fact, nine homebuyers opposed this move.
Jaypee Infratech was put into insolvency process in August 2017, and soon after found itself in the Supreme Court when the homebuyers of the real estate developer demanded to be treated at par with other creditors. The latest amendment to the Insolvency and Bankruptcy Code, based on the deliberations of the Insolvency Law Committee, assigned the financial creditor status to homebuyers. As creditors, it is required that their names and amount claimed be displayed on the website. It was argued by the RP that disclosure of names of allottees may “result in harassment or unnecessary public speculations on account of similarity of names with those holding high offices or constitutional posts.“
The banks opposed this application arguing that the RP is attempting a ‘backdoor challenge’ to Regulation 13 without challenging its vires, and an exemption cannot be sought without challenging its vires. Further, neither did the homebuyers support this move, nor did the creditors’ committee permit the RP to approach the NCLT for this request.
The NCLT noted that object of directing the RP to publish the list is to maintain transparency in respect of their claims and to determine voting share, which is why such information is required to be placed not only before the creditors’ committee but others creditors as well, and the world at large. The NCLT further recorded that the right to acquire, hold and dispose of property is only statutory right, not a fundamental right, and publication of their names will not in anyway infringe their fundamental right to privacy. The NCLT then found that Regulation 13(2) is mandatory and accordingly, directed the RP to publish the names.
In the insolvency resolution process of Jaypee Infratech Limited, the nine associations of the home buyers are being led by Senior Counsel Anand Grover, briefed by P&A Law Offices, through a team comprising Partners Amit K. Mishra and Ketan Mukhija along with Senior Associate Gaurav Priyadarshi and Associate Shivam Pandey. The RP is being assisted by Kessar Das B. Associates and the consortium of lenders is being represented by Partner Bishwajit Dubey of Cyril Amarchand Mangaldas.
(Read the order)