Court’s Decision
The Supreme Court allowed the appeal of homebuyers challenging the orders of the NCLT and NCLAT, which had relegated them to only 50% refund under a resolution plan. The Court held that once a claim is verified and admitted by the Resolution Professional and reflected in the list of financial creditors, it cannot be treated as a belated claim under Clause 18.4(xi) of the Resolution Plan. Accordingly, the Court directed the successful Resolution Applicant to execute the conveyance deed and hand over possession of the apartment within two months.
Facts
The dispute arose from the failure of a real estate company (part of the IREO Group) to deliver possession of an apartment booked in 2010. The appellants paid ₹57,56,684 out of the total ₹60,06,368, with possession promised by November 2013. After repeated delays, they approached the Consumer Commission for relief.
While proceedings were pending, insolvency proceedings under the IBC were initiated against the builder in October 2018. The appellants initially filed a claim for another plot they owned but also submitted a claim for the present apartment in January 2019, later resubmitting it in February 2020 following an email invitation by the Resolution Professional.
The Resolution Professional duly verified and admitted the claim, listing it at Serial No. 636 in the creditors’ list dated April 2020. Despite this, possession was not delivered, and both the NCLT and NCLAT held that the claim was belated and the buyers were only entitled to 50% refund, leading to the present appeal.
Issues
- Whether the appellants’ claim, having been verified and admitted, could still be treated as a belated claim under Clause 18.4(xi).
- Whether the appellants were entitled only to 50% refund or to possession of the apartment under Clause 18.4(ii) and Clause 18.4(vi)(a).
- Whether denial of possession despite verified inclusion in the list of creditors violates the object of the IBC and fairness in resolution
Petitioner’s Arguments
The appellants argued that they are bona fide homebuyers who had paid almost the entire consideration. They stressed that their claim was first submitted in January 2019 and later resubmitted in February 2020 pursuant to the Resolution Professional’s email. Since their claim was verified and admitted in April 2020, they contended that Clause 18.4(xi), which deals with unverified or uninformed claims, had no application.
They urged that their case fell within Clause 18.4(vi)(a), entitling them to delivery of possession or equivalent accommodation. They relied on Puneet Kaur v. K.V. Developers Pvt. Ltd. (2022), where it was held that non-consideration of claims reflected in records leads to unfair resolution. The appellants argued that relegating them to a partial refund would unjustly deprive them of their life savings and the home they had contracted for.
Respondent’s Arguments
The Resolution Professional and the successful Resolution Applicant contended that the appellants failed to file a valid claim within the stipulated timelines of the public announcement in October 2018. They denied receipt of any claim at the Mohali office in January 2019 and argued that the only claim filed was in February 2020, after the Committee of Creditors had already approved the Resolution Plan in August 2019.
They submitted that the Form-CA itself calculated interest only up to February 2020, proving that no earlier filing existed. Thus, the appellants fell under Clause 18.4(xi), which entitled them only to a 50% refund. They maintained that the NCLT and NCLAT rightly rejected the plea for possession.
Analysis of the Law
The Court examined Section 62 of the IBC, which governs appeals, and scrutinized the Resolution Plan’s Clause 18.4. The Court emphasized that Clause 18.4 distinguishes between verified claims and belated or unverified claims. Verified claims must be honoured, while unverified or late claims fall within Clause 18.4(xi) and attract limited benefits.
The Court underscored that once the Resolution Professional had verified and admitted the claim and included it in the statutory list of creditors, it attained legal recognition. Ignoring such recognition would reduce the statutory process to a “meaningless formality” and undermine fairness in insolvency resolution.
Precedent Analysis
- Puneet Kaur v. K.V. Developers Pvt. Ltd., 2022 SCC Online NCLAT 245 – Held that claims reflected in the corporate debtor’s records must be considered in the resolution process, and exclusion leads to unfairness. This precedent strongly supported the appellants’ case.
- Paramjeet Kaur v. Puma Realtors Pvt. Ltd. (2025) – In contrast, the Supreme Court dismissed a similar claim by other buyers earlier in March 2025, but that was distinguished here as the appellants’ claim had already been verified and admitted.
These precedents helped the Court balance the treatment of verified versus belated claims under the IBC.
Court’s Reasoning
The Court found that the appellants were bona fide allottees who had paid almost the entire sale consideration more than a decade earlier. Their claim was resubmitted in February 2020, verified by the Resolution Professional, and included in the creditors’ list. This established that their claim could not be treated as belated.
The Court observed: “To disregard such an admitted claim and confine the Appellants to the limited benefit under Clause 18.4(xi) is not to preserve the binding effect of the plan but to misapply it.”
The Court emphasized the need to protect individual homebuyers who invest life savings in projects. Relegating them to partial refunds would defeat the object of IBC and cause unjust hardship.
Conclusion
The Supreme Court set aside the orders of the NCLT and NCLAT and directed the respondents to execute the conveyance deed and hand over possession of the apartment within two months. The Court clarified that Clause 18.4(xi) did not apply to the appellants, whose claim was verified and admitted, and they were entitled to the reliefs sought.
Implications
This judgment reaffirms judicial commitment to protecting homebuyers in insolvency proceedings. It clarifies that once a claim is verified and admitted, it cannot later be relegated as belated. The ruling provides certainty to allottees, ensuring they are treated fairly under resolution plans. It also strengthens accountability of Resolution Professionals to faithfully reflect verified claims.
For the real estate sector, this judgment sends a strong signal that homebuyers’ rights will not be diluted under the guise of technicalities, and possession must be delivered where claims stand admitted.
FAQs
Q1. What did the Supreme Court hold about belated claims in IBC homebuyer cases?
The Court held that if a homebuyer’s claim is verified and admitted by the Resolution Professional, it cannot be treated as belated, even if submitted after plan approval.
Q2. What relief was granted to the appellants?
The Court directed the respondents to execute the conveyance deed and deliver possession of the apartment within two months.
Q3. Why was Clause 18.4(xi) of the Resolution Plan held inapplicable?
Because the appellants’ claim had already been verified, admitted, and reflected in the creditors’ list. Clause 18.4(xi) applies only to unverified or uninformed claims.
