Homebuyers Cannot Be Forced To Act As Resolution Applicants To Complete Their Own Project: NCLT Kolkata

The National Company Law Tribunal (NCLT) at Kolkata has stepped in on the insolvency resolution of Riverbank Developers Pvt Ltd. It held that homebuyers cannot be forced to step into the shoes of a resolution applicant just because a housing project remains incomplete. The tribunal made it clear that the objective of insolvency proceedings is timely and fair resolution, not the imposition of additional financial or construction obligations on homebuyers who lack the means or willingness to undertake them. A coram of Judicial Member Bidisha Banerjee and Technical Member Siddharth Mishra, in an order dated December 3, 2025, observed that law cannot be used to shift the financial and construction burden of a stalled project onto flat buyers. The tribunal said: “Individual Homebuyers may have divergent views but ultimately, they vote as a class and if 253 homebuyers do not want to complete the project themselves, they cannot be forced to don the hat of a Resolution Applicant. If they do not have the wherewithal, they cannot be forced to complete their own project incurring further expenditure and further liability.”, it said. Riverbank Developers Pvt Ltd was admitted into insolvency on an application filed by Canara Bank in 2022. During the corporate insolvency resolution process, the Committee of Creditors approved a parcel-wise resolution strategy. While other parcels of the project were opened to strategic and financial investors, Parcel 3, covering Phase II, was restricted only to homebuyers. The challenge before the tribunal was brought by 253 homebuyers of Hiland Green Phase II, part of an integrated township developed by Riverbank Developers in Rajarhat. They questioned the resolution framework under which Parcel 3 of the project was opened only to a registered association of existing buyers, effectively excluding outside investors. The homebuyers argued that the project was already substantially completed, with about 90 to 95 percent of the sale consideration paid.They contended that forcing them to form an association and submit a resolution plan would saddle them with further financial exposure and legal liability, and could also discourage serious investors from participating. Accepting these submissions, the tribunal noted that homebuyers form a distinct class of creditors. It said that although buyers may have differing views, they are individuals who book flats, often after taking housing loans, and cannot be burdened with additional financial obligations under insolvency law. The tribunal observed: “They are the class who have booked flats having taken loan from Banks and are already saddled with the liberty to repay their loans from their hard earned money. They make payment for their flats only with the hope of getting possession of their flats for their residence", the tribunal said. The tribunal accordingly directed the issuance of a fresh form inviting project-specific resolution plans, with a modified eligibility criteria open to all prospective applicants. It also extended the timelines by 90 days to ensure a time-bound resolution. Case Title: The Canara Bank Ltd vs Riverbank Developers Pvt Ltd Case Number: IA No. 1184/KB/2025 in CP(IB) No. 345/KB/2022 For Applicants: Advocate Soumya Roy appeared for the homebuyers; Senior Advocate Manju Bhuteria, along with Advocates Rajshree Kajaria and Arundhati Barman Roy, represented another group of homebuyers; Advocates Mamta Binani, Rohit Sharma and Devesh Kr. Bhutra appeared for a set of homebuyers raising objections to the resolution framework; Advocates Pranit Bag and Mandeep Kaur represented additional homebuyers who were parties to connected proceedings; Advocates Viswarup Acharyya and Akash Dutta appeared for another applicant. For Respondents: Advocates Soham Sen and Sourav Sharma appeared for certain financial creditors; Advocates Pooja Shah, Rishav Banerjee, Soorjya Ganguli, Pooja Chakrabarti, Kiran Sharma and Sagnik Aditya for resolution professional, Advocate Shakti Kumar Chatterjee appeared for Aditya Kumar Pal and another respondent.Click Here To Read/Download Order

Homebuyers Cannot Be Forced To Act As Resolution Applicants To Complete Their Own Project: NCLT Kolkata

Kirit Singhania

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