NCLAT Delhi Rejects Homebuyers Application To Initiate CIRP Proceeding Against Ansal Hi-Tech Township

The National Company Law Appellate Tribunal (NCLAT) New Delhi, comprising Justice M. Venugopal (Judicial Member) and Mr. Arun Baroka (Technical Member), has rejected the homebuyers application under Section 7 of IBC seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Ansal Hi-Tech Township. Background Fact The Appellant is a Creditor in Class, representing homebuyers who purchased their flats between 2011 and 2012 in the Sushant Metropolis Township located in Gautam Budh Nagar, which was being developed by the Respondent (Corporate Debtor). According to the allotment agreements, the respondent promised to deliver possession of the flats within 36 to 42 months from the date of the sanctioned plan. However, the respondent failed to deliver the flats within the promised timeframe. Aggrieved by the delay in possession, the appellant filed an application under Section 7 of IBC in the NCLT Delhi to initiate a CIRP proceedings against the respondent. In its order dated 06.01.2023, the NCLT Delhi rejected the appellant's application and held that the homebuyers belong to different projects within the Township, each of which is being constructed and registered separately under RERA. Therefore, to initiate CIRP, homebuyers must meet the minimum threshold requirement of either 10% or 100 homebuyers for each project. Thereafter, Appellant filed an appeal against NCLT Delhi's order dated 06.01.2013 before the NCLAT. Contention of the Appellant The Appellant contended that the Township should be considered as a single project because the allotment agreement stipulates Sushant Megapolis as one complete project. The Appellant further contended that NCLT Delhi wrongly interpreted explanation (ii) of Section 5(8) of IBC to mean that each RERA Registration would constitute a Real Estate Project, and Creditors in a Class/Allottees, while filing an Application under Section 7 of the IBC, shall have to meet the criteria of 100 homebuyers or 10% of the homebuyers, in accordance with the RERA Registration granted to a Real Estate Project. NCLAT Verdict NCLAT upheld the NCLT Delhi order dated 06.01.2013 and held that the homebuyers are associated with different projects, each being constructed separately and registered individually under RERA. Consequently, they fail to meet the minimum threshold required to commence CIRP proceedings against the Respondent. Furthermore, NCLAT held that homebuyers are from numerous different projects, and they have not established their case as creditors of a class concerning any particular project registered with RERA to fulfil the requirement of 10% or 100 homebuyers, as stipulated under Section 7(1) of IBC 2016. NCLAT further referred relevant part of Section 7(1) of IBC 2019, which is read as follows: Section 7 - Initiation of corporate insolvency resolution process by financial creditor. (1) A financial creditor either by itself or jointly with [other financial creditors, or any other person on behalf of the financial creditor, as may be notified by the Central Government] may file an application for initiating corporate insolvency resolution process against a respondent before the Adjudicating Authority when a default has occurred. [Provided that for the financial creditors, referred to in clauses (a) and (b) of sub-section (6A) of section 21, an application for initiating corporate insolvency resolution process against the respondent shall be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent. of the total number of such creditors in the same class, whichever is less: Provided further that for financial creditors who are allottees under a real estate project, an application for initiating corporate insolvency resolution process against the respondent shall be filed jointly by not less than one hundred of such allottees under the same real estate project or not less than ten per cent. of the total number of such allottees under the same real estate project, whichever is less. Therefore, NCLAT upheld the order of NCLT Delhi and concluded that the appellant's application to initiate CIRP proceedings against the respondent is not maintainable as it does not fulfil the requirements of the minimum threshold. Case: Pankaj Mehta VS M/s. Ansal Hi-tech Township Limited Citation: Comp. App (AT) (INS) No. 248 / 2023 Counsel for Appellant: Mr. Sahil Sethi, Mr. Samriddh Bindal & Mr. Vikash Kumar, Advocates Counsel for Respondent: Mr. Anshuj Dhingra, Ms. Shubhangda Singh & Ms. Muskan Banga, Advocates Click Here to read / download the order

NCLAT Delhi Rejects Homebuyers Application To Initiate CIRP Proceeding Against Ansal Hi-Tech Township

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