Allottee Cannot Be Considered Financial Creditor When Allotted Unit Is Cancelled At Their Request: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that an allottee of a unit cannot be considered a financial creditor if the allotted unit was canceled at their request and the loan taken to purchase the flat was settled with the lending bank. Brief Facts: Gaurav Jindal (Appellant) was allotted Flat No.C-103 on payment of Rs.29 lakhs on 04.06.2015. The entire payment of Rs.29 Lakhs was made by the UCO Bank to the corporate debtor by loan taken by the Appellant for payment against the flat. On 03.02.2018, Appellant requested the corporate debtor to cancel the allotment and clear the bank loan amount. Bank has initiated proceedings against the Appellant before the Debt Recovery Tribunal (DRT). Appellant filed a complaint before the Uttar Pradesh Real Estate Regulation Authority (UP RERA) on 02.03.2019. On 05.08.2019, the UP RERA issued decree against the corporate debtor for payment of outstanding alongwith the interest. In the year 2020 before the DRT, Appellant settled its dues with the bank. The bank after receiving the entire payment of Rs.17 lakhs towards full and final settlement of dues has directed the OA No.617 of 2018 filed by the bank to be withdrawn. By order dated 22.03.2021, Corporate Insolvency Resolution Process (CIRP) commenced against the Corporate Debtor. On 06.04.2021, Appellant filed its claim in Form CA along with the supporting documents including the RERA order. On query to the Respondent, Appellant filed its claim again in Form C. The Resolution Plan of Successful Resolution Applicant (SRA) was approved in the year 2021. Homebuyers have filed an appeal before the Supreme Court in “Vishal Chelani & Ors. vs. Debashis Nanda- Civil Appeal No.3806 of 2023” where homebuyers who had obtained decree from UP RERA were not treated as homebuyers by the Resolution Professional. Appeal was allowed by the Supreme Court on 06.10.2023 and Appellant of that case was declared as financial creditor alongwith other homebuyers. Appellant- Gaurav Jindal, after the judgment of the Supreme Court filed an IA No.2413 of 2024 seeking a direction to the Respondent to accept the claim at par with other homebuyers. Notice was issued in the application and by order dated 10.06.2024, the application has been rejected. Contentions: The Appellant submitted that the Appellant's claim has been accepted as 'unsecured financial creditor' whereas Appellant was entitled to be treated as homebuyer. It was also argued that the Appellant is also entitled for the benefit of the judgment of the Supreme Court in Vishal Chelani & Ors (Supra). Per contra, the Respondent submitted that the Appellant's claim was rightly accepted as other creditors since it was on the own request of the Appellant that the unit was cancelled. Insofar as the amount paid by the Appellant to the bank, the said fact was not brought into notice of the Resolution Professional and SRA. Lastly, it was argued that the amount which has been paid by the Appellant to the bank that amount shall be paid to the Appellant out of the amount reserved in the Resolution Plan in the interest of justice. Observations: The Tribunal noted that the present is a case where Appellant on his own request got his unit cancelled and he has filed the claim with respect to the amount which was paid to the corporate debtor towards allotment of the unit as noted above, allotment was made on 04.06.2025 and the entire amount was paid by the UCO Bank to the corporate debtor. No payment was made by the Appellant to the Corporate Debtor. It further observed that the Appellant entered into settlement with the Bank and paid Rs.17 lakhs towards full and final settlement of the dues, hence, there are no bank dues with respect to the unit in question. The Tribunal held that the Resolution Professional shall ensure that the amount of Rs.17 lakhs which was paid by the Appellant is paid to the Appellant from the amount reserved in the Resolution Plan. Accordingly, the present appeal was dismissed. Case Title: Gaurav Jindal Versus Debashish Nanda, RP Bulland Buildtech Pvt. Ltd. Case Number:Company Appeal (AT) (Insolvency) No. 2076 of 2024 & I.A. No. 7357 of 2024 Judgment Date: 18/03/2025 For Appellant:Mr. Rakesh K. Bajaj, Ms. Arohi Bhalla, Advocates. For Respondents: Ashok Bhushan, J. Mr. Sumant Batra, Mr. Sarthak Bhandari, Advocates for RP. Ms. Anuja Pethia, Mr. Rishabh Govila, Advocates for SRA. Click Here To Read/Download The Order

Allottee Cannot Be Considered Financial Creditor When Allotted Unit Is Cancelled At Their Request: NCLAT

Mohd Malik Chauhan

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Allottee Cannot Be Considered Financial Creditor When Allotted Unit Is Cancelled At Their Request: NCLAT

Mohd Malik Chauhan

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

This is a premium content
Available exclusively to
Our subscribers