Verified Claim Incorporated In Published List Of Creditors Acquire Recognition Within CIRP : Supreme Court Grants Relief To Flat Buyers
The Civil Appeal before the Supreme Court was filed under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the judgment passed by the National Company Law Appellate Tribunal.
Justice Sanjay Kumar, Justice Satish Chandra Sharma, Supreme Court
The Supreme Court has granted relief to homebuyers by directing that the apartment in question be handed over and possession be given to them. The Apex Court also held that when the claim was duly verified by the Resolution Professional and the same was incorporated in the published list of creditors, the claim acquired full legal recognition within the CIRP process.
This Civil Appeal before the Apex Court was filed under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the judgment passed by the National Company Law Appellate Tribunal (NCLAT), affirming the decision rejecting the Appellant’s claim for possession of their residential apartment in the real estate project of M/s Puma Realtors Private Limited, Corporate Debtor.
The Division Bench of Justice Sanjay Kumar and Justice Satish Chandra Sharma stated, “The Appellants claim was resubmitted on 07.02.2020; that it was duly verified by the Resolution Professional; and that it was incorporated in the published list of creditors dated 30.04.2020. Once such verification and incorporation occurred, the claim acquired full legal recognition within the CIRP process.”
“We are unable to countenance the approach of the NCLAT in brushing aside this admitted position, and in treating the Appellants as if they had not filed any claim at all. The publication of the list of financial creditors is an act in discharge of a statutory duty by the Resolution Professional. It cannot be reduced to a meaningless formality”, it further added.
Advocate Aditya Wadhwa represented the Appellant while AOR Vaibhav Mishra represented the Respondent.
Factual Background
The erstwhile Corporate Debtor, M/s Puma Realtors Private Limited, an IREO Group company, undertook development of integrated residential townships in Punjab, including the project IREO Rise (Gardenia). The project, conceived as a modern residential complex, envisaged the delivery of multiple residential blocks with allied amenities and facilities. The Appellants, both residents of Bengaluru, booked an apartment in the said project in the year 2010. Against the total sale consideration of Rs 60,06,368, the Appellants paid Rs 57,56,684, constituting almost the entirety of the contractual amount, the balance being agreed to be adjusted on account of the delay in delivery of possession.
The Corporate Debtor, however, failed to deliver possession within the agreed period or thereafter. The Appellants approached the State Consumer Disputes Redressal Commission seeking a refund of the amount. The NCLT admitted an application under Section 7 of the IBC against the Corporate Debtor, thereby commencing the Corporate Insolvency Resolution Process (CIRP) in respect of M/s Puma Realtors Private Limited. Considering the foregoing, the Commission, disposed of the complaint with liberty reserved to the Appellants to pursue their claim before the competent authority in the CIRP proceedings.
The appellants, in spite of the admitted inclusion of their claim in the list of financial creditors, did not receive possession of the allotted apartment. Constrained thereby, the Appellants approached the Adjudicating Authority seeking directions to the Resolution Professional and the Successful Resolution Applicant for execution of the conveyance deed and handover of possession, which was rejected. Their appeal before the NCLAT was dismissed, resulting in the impugned order being challenged before the Apex Court.
Reasoning
The Bench took note of the fact that the Appellants were bona fide homebuyers, having booked an apartment with the Corporate Debtor as far back as 2010, and having executed a Buyer’s Agreement in the year 2011. A sum of Rs. 57,56,684, constituting almost the entirety of the sale consideration, was paid. The balance was contractually adjustable against penalty for delay in handing over possession.
Noting that Clause 18.4 drew a clear distinction between verified claims and belated or unverified claims, the Bench held, “Relegating bona fide allottees, who have paid substantial consideration years in advance, to the status of mere refund claimants runs contrary to the very object of the legislative framework.”
The Bench was of the view that the facts of the case highlight the plight of individual homebuyers, who invest their life savings in the hope of securing a roof over their heads. The Appellants had paid nearly the entire sale consideration as far back as 2011. To deny them possession today, despite their claim having been duly verified and admitted, would inflict unfair and unwarranted prejudice, it stated.
Setting aside the order of the NCLT and NCLAT and allowing the appeal, the Bench ordered, “Respondent(s) shall execute the Conveyance Deed and hand over possession of Apartment No. GBD-00-001, Block D, IREO Rise (Gardenia), Mohali to the Appellants within a period of two months from today.”
Cause Title: Amit Nehra v. Pawan Kumar Garg (Neutral Citation: 2025 INSC 1086)
Appearance
Appellant: Advocates Aditya Wadhwa, Sonal Sarda, Noyonika Deori, AOR R. Ilam Paridi, Advocates Aman Kumar, Vishnu Kumar, Saurav Beniwal, Sidhant Verma, Mansi Vats
Respondent: AOR Vaibhav Mishra, Anuja Pethia , Advocate Himanshu Gupta, AOR Manoj C. Mishra