Supreme Court Rules in Favor of Homebuyers, Directs Possession of Flat Despite Delayed Filing

Supreme Court Rules in Favor of Homebuyers, Directs Possession of Flat Despite Delayed Filing

Introduction

The Supreme Court of India has ruled that once a claim is verified and admitted by the Resolution Professional (RP), it cannot be treated as “belated” to deny substantive relief under a resolution plan. A bench of Justices Sanjay Kumar and Satish Chandra Sharma held that the verified and admitted claims of homebuyers could not be downgraded to 'unverified' merely because of delayed filing.

Factual Background

The appellants had booked an apartment in 2010, paying ₹57.56 lakh of the ₹60.06 lakh consideration. When the developer failed to deliver possession, insolvency proceedings were initiated against them in 2018. The appellants' claim was verified and included in the RP's list of financial creditors in April 2020. However, when the resolution plan was implemented, the Resolution Applicant refused to grant possession, instead limiting them to a refund.

Procedural Background

The NCLT and NCLAT upheld the treatment of the appellants' claim under the residuary clause meant for unverified or unfiled claims. The appellants challenged this decision before the Supreme Court.

Issues

The main issue before the Supreme Court was whether the verified and admitted claims of the homebuyers could be downgraded to 'unverified' merely because of delayed filing, and whether they were entitled to possession of the flat.

Contentions of the Parties

Appellants: The appellants argued that their verified and admitted claims could not be disregarded, and they were entitled to possession of the flat.

Respondents: The respondents argued that the appellants' claim was belated and therefore, they were not entitled to possession.

Reasoning and Analysis

The Supreme Court held that:

• Verified Claims: Once a claim is verified and admitted by the RP, it becomes part of the insolvency process and cannot later be disregarded.
• Entitlement to Possession: The appellants were entitled to possession of the flat, despite their claim being filed after the initial deadline.

Implications

The Supreme Court's decision has significant implications for homebuyers who have invested their life savings in apartments and are awaiting possession. The ruling emphasizes the importance of treating verified and admitted claims with priority.

Relief Sought

The appellants sought possession of the flat, and the Supreme Court allowed their appeal, directing the Resolution Applicant to execute the conveyance deed and hand over possession of the flat to the appellants within two months.

In this case the appellant was represented by Mr. Aditya Wadhwa, Ms. Sonal Sarda, Ms. Noyonika Deori, Mr. R. Ilam Paridi, AOR Mr. Aman Kumar, Mr. R. Vishnu Kumar, Mr. Saurav Beniwal, Mr. Sidhant Verma, Ms. Mansi Vats, Advocates.

Meanwhile the respondent was represented by Mr. Vaibhav Mishra, AOR Ms. Anuja Pethia, AOR Mr. Noor Shergill,Mr. Rishabh Govila, Mr. Rishabh Nigam, Mr. Himanshu Gupta, Mr. Manoj C. Mishra, AOR.