Appellate Tribunal acknowledges registered agreements and full payments in resolution process, ensuring equitable treatment for genuine homebuyers.
In a landmark decision, the National Company Law Appellate Tribunal (NCLAT) has overturned an earlier ruling by the National Company Law Tribunal (NCLT), affirming the rights of homebuyers with registered agreements and full payments in the Corporate Insolvency Resolution Process (CIRP). The judgment, delivered by the Principal Bench of NCLAT in New Delhi on June 30, 2026, addresses the appeal filed by Mr. Rajkumar Jhawar and Mrs. Shobha Jhawar against Mr. Arun Kapoor, the Resolution Professional (RP) for Monarch Brookfields LLP.
The appellants, genuine homebuyers, had been aggrieved by the dismissal of their application to exclude their purchased flat from the resolution process. Despite having a registered Agreement to Sell and having paid the full consideration for the flat, their claims were initially rejected due to a belated submission. The NCLAT's decision emphasizes that non-consideration of claims reflected in corporate debtor's records leads to inequitable and unfair resolution, thus reinstating the appellants' claims within Category A of the Resolution Plan.
The appellate tribunal criticized the Resolution Professional for inefficiency and negligence in failing to notify homebuyers and disregarding documented claims. The judgment highlights the importance of treating bona fide homebuyers equitably, especially when their claims are recorded in the corporate debtor's virtual data room. Furthermore, the tribunal underscored that the doctrine of "Clean Slate" should not be used to deny claims documented in corporate debtor's records during CIRP.
The tribunal's decision aligns with previous judicial precedents, reinforcing the rights of homebuyers with registered deeds and payments reflected in the corporate debtor's ledger. This judgment sets a significant precedent for future insolvency cases involving real estate transactions, ensuring that genuine homebuyers are not unfairly excluded from resolution plans.
Bottom line:-
Insolvency and Bankruptcy Code - Non-consideration of claims reflected in corporate debtor's records leads to inequitable and unfair resolution.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 7, 31
