Tribunal Rejects Homebuyers' Plea for Interest and Delay Compensation under IBC Framework
In a significant ruling by the National Company Law Tribunal (NCLT) Chandigarh, the tribunal has dismissed the application filed by homebuyers Ashok Gupta and others, challenging the manner in which their claims were admitted by the Resolution Professional (RP) in the insolvency proceedings of Samar Estate Pvt Ltd. The decision, delivered on June 5, 2026, by a bench comprising Mr. Khetrabasi Biswal and Mr. Shishir Agarwal, emphasizes the strict adherence to the Insolvency and Bankruptcy Code (IBC) and the Corporate Insolvency Resolution Process (CIRP) Regulations.
The applicants, who were allottees of a unit in the project "Ess Vee Apartments," contended that the RP, Rahul Jindal, had incorrectly adjusted a Rs. 40 lakh refund, received prior to the CIRP commencement, entirely towards the principal, neglecting accrued interest and delay compensation. They argued that such refunds should first be appropriated towards interest, in line with general appropriation principles upheld in civil law.
However, the tribunal found that the RP acted in accordance with the IBC, which prioritizes claims "due and outstanding" as of the insolvency commencement date. It noted that the refunded amount could not be considered for interest accrual post-refund, as this would artificially inflate the claims and disrupt equitable treatment among creditors.
The ruling further highlighted that the IBC does not mandate a specific rule of appropriation, allowing the RP to exercise commercial prudence. Additionally, the tribunal rejected the applicants' claims for delay possession charges, citing the lack of contractual or enforceable basis, especially given the substantial pre-insolvency refund.
This decision underscores the NCLT's stance on maintaining procedural integrity within the IBC framework, ensuring that all actions during insolvency proceedings are consistent with statutory regulations, thereby reinforcing the RP's role in safeguarding equitable creditor treatment.
Bottom line:-
Insolvency and Bankruptcy Code, 2016 - Claims under CIRP - Refund amounts received prior to CIRP commencement cannot be appropriated towards interest unless expressly stipulated. The resolution professional is to ensure the claim reflects only the due and outstanding amount as on the insolvency commencement date, in compliance with the Code and CIRP Regulations.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 5(8), Section 60(5), CIRP Regulations, Regulation 16A(7)
