Genuine Homebuyers’ Claims Cannot Be Rejected for Delay If Reflected in Corporate Debtor’s Records: NCLAT

Genuine Homebuyers’ Claims Cannot Be Rejected for Delay If Reflected in Corporate Debtor’s Records: NCLAT

Introduction

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Arun Baroka (Member-Technical), held that genuine homebuyers whose names and payments are reflected in the corporate debtor’s records cannot be denied recognition as creditors merely due to delay in filing claims. The Tribunal emphasized that procedural timelines cannot override substantive contractual rights and directed that such homebuyers’ claims must be duly incorporated into the Resolution Plan.

Factual Background

The case pertains to Today Homes Noida Pvt. Ltd., which developed a residential project named “Ridge Residency” in Noida, Uttar Pradesh. The appellant, Ms. Reena, was an allottee of Flat No. I-1406, valued at ₹32,25,250, and had paid ₹31,92,661 between 2011 and 2019. However, due to her professional commitments in Agra, she was unaware of the initiation of the Corporate Insolvency Resolution Process (CIRP) against the developer. Consequently, she filed her claim with a delay of 1,362 days.

Procedural Background

The Resolution Professional (RP) rejected the appellant’s claim, citing Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which mandates that claims be filed within 90 days of the insolvency commencement date. The National Company Law Tribunal (NCLT) upheld the RP’s decision, relying on the Supreme Court’s judgment in RPS Infrastructure Ltd., holding that belated claims could not be entertained when the Resolution Plan had reached an advanced stage.

Issues

1. Whether homebuyers’ claims, reflected in the records of the corporate debtor, can be rejected merely on the ground of delay in filing.

2. Whether the Resolution Professional is duty-bound to consider such claims, even if filed beyond the prescribed timeline, where evidence of payment exists in the corporate debtor’s books.

Contentions of the Parties

Appellant’s Contentions: The appellant argued that her name and payment details were clearly reflected in the records of the corporate debtor, establishing her as a bona fide allottee. It was contended that the delay in filing the claim was neither deliberate nor mala fide, as she had no knowledge of the CIRP proceedings due to her relocation. The appellant relied on the Puneet Kaur v. M/s. K.V. Developers Pvt. Ltd. decision, where the NCLAT directed consideration of homebuyers’ claims reflected in the corporate debtor’s records.

Respondent’s Contentions: The Resolution Professional maintained that the claim was filed well beyond the permissible period under Regulation 12(2) and could not be entertained once the Resolution Plan was finalized. It was argued that acceptance of such delayed claims would disrupt the insolvency process and prejudice the approved plan’s finality.

Reasoning and Analysis

The Tribunal carefully analyzed the distinction between the present case and RPS Infrastructure Ltd. It observed that RPS Infrastructure involved a commercial creditor who was aware of the proceedings, whereas the present case concerned individual homebuyers who had valid allotments and whose payments were duly recorded in the corporate debtor’s books. The Bench reiterated that: “When the amount paid by the unit holders on the basis of valid allotment is reflected in the record of the Corporate Debtor, the judgment of Puneet Kaur vs. M/s. K.V. Developers Private Limited fully covers the issue, and the said payments by unit holders cannot be ignored by the Resolution Applicant.”

The Tribunal emphasized that the Resolution Professional’s duty under Section 18 of the IBC extends to collecting all relevant financial information and verifying claims from the corporate debtor’s records. Thus, once payments and allotments are verifiable from those records, such claims cannot be rejected solely due to delay. The NCLAT held that procedural timelines are directory, not mandatory, when it comes to recognizing substantive rights arising from lawful transactions. The Tribunal directed that homebuyers’ claims be incorporated into the Resolution Plan through an addendum process to ensure equitable treatment.

Implications

This decision reaffirms the pro-consumer and equitable intent of the Insolvency and Bankruptcy Code, 2016. It clarifies that genuine homebuyers cannot be denied recognition as financial creditors merely due to procedural delays if their payments are recorded in the developer’s books. Moreover, by directing inclusion of such claims in the Resolution Plan, the NCLAT strengthened the accountability of Resolution Professionals and ensured that homebuyers’ substantive rights prevail over technical procedural barriers. This judgment also reinforces the precedent set in Puneet Kaur, ensuring uniform treatment of similarly situated homebuyers across insolvency proceedings.

In this case the appellant was represented by Mr. Bishwajit Dubey, Mr. Nipun Gautam and Ms. Udita Singh, Advocates.