Belated Claims Of Homebuyers Can't Be Rejected When Reflected In Corporate Debtor's Records: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that claims of genuine allottees whose names are reflected in the corporate debtor's records cannot be rejected merely on the ground that the claims were filed belatedly. A bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held 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” (supra) fully covers the issue and the said payments by unit holders cannot be ignored by Resolution Applicant and such claims were required a due consideration by the Resolution Applicant.” Background: 'Today Homes Noida Pvt. Ltd.' (Corporate Debtor) had developed a housing project “Ridge Residency” at Noida, Uttar Pradesh. The Appellant, Ms.Reena, was one of the allottees and had been allotted Flat No. I-1406 for ₹32,25,250 and had paid ₹31,92,661 between 2011 and 2019. However, she could not file the claim in the Corporate Insolvency Resolution Process (CIRP) as she was residing in Agra at that time for professional reasons and was unaware of the insolvency proceedings. The Appellant filed the claim with the delay of 1,362 days. The Resolution Professional (RP) rejected the claim citing Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 which requires the claim to be submitted within 90 days from the insolvency commencement date. The National Company Law Tribunal (NCLT) also upheld the RP's decision holding that as per the Supreme Court's judgment in RPS Infrastructure Ltd., the belated claims cannot be accepted once the Resolution Plan is at an advanced stage. Aggrieved, the Appellant and similarly situated homebuyers had filed appeals before the NCLAT against the NCLT's decision. Findings: The Tribunal made a distinction between the facts of the present case and the RPS Infrastructure observing that in RPS Infrastructure, the appellant was a commercial creditor, not an individual homebuyer. The Appellant was litigating with the corporate debtor prior to initiation of the CIRP, showing awareness of the proceedings. In contrast, in the present case, the tribunal was dealing with the case of Homebuyers whose allotments and payments were duly reflected in the books of account and the corporate debtor's record. It held that “In RPS Infrastructure, the appellant was a commercial entity and was litigating with the Corporate Debtor even before commencement of CIRP. Hence, the Supreme Court held that they ought to have been vigilant. In the present case, we are concerned with homebuyers whose allotments and payments are duly reflected in the records of the Corporate Debtor.” The Tribunal further observed that the RP is statutorily bound to collect and verify all claims from the records of the corporate debtor. Once homebuyers' names and payment are reflected in the corporate debtor's records, they cannot be brushed aside merely because they failed to file the claims within 90 days. It held that “the Resolution Professional is obligated to verify the claims of such allottees which are verifiable from the records of the Corporate Debtor. Procedural timelines cannot override substantive rights arising from the contractual relationship between the homebuyer and the developer.” The Tribunal relied on Puneet Kaur where the NCLAT while dealing with the similar issue directed the Resolution Professional to submit the details of Homebuyers whose details were reflected in the records of the corporate debtor to the Resolution Applicant who was further directed to prepare an addendum to the Resolution Plan and place it before the Committee of Creditors for consideration. In light of the above discussion, the Tribunal held that the present matter is squarely covered by Punee Kaur's case. It held 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” (supra) fully covers the issue and the said payments by unit holders cannot be ignored by Resolution Applicant and such claims were required a due consideration by the Resolution Applicant.” The Tribunal passed the following directions- 1.The Resolution Professional to prepare details of all Homebuyers whose names and payments are reflected in corporate debtor's records. 2. The Resolution Applicant shall prepare an addendum to the Resolution Plan which shall include the claims of the Appellants as reflected in the Affidavit of the Resolution Professional filed. 3. The CoC shall take an appropriate decision and place the same before the Adjudicating Authority. 4.The Adjudicating Authority shall consider both the addendum and...

Belated Claims Of Homebuyers Can't Be Rejected When Reflected In Corporate Debtor's Records: NCLAT New Delhi

Mohd Malik Chauhan

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