Tribunal affirms that individual homebuyers lack locus standi to challenge resolution plan once approved by Committee of Creditors; differential treatment between Builder Buyer Agreement holders and MoU holders upheld as lawful
The National Company Law Tribunal (NCLT), New Delhi Bench, in its judgment dated October 5, 2026, dismissed an application challenging the resolution plan approved for Spaze Towers Pvt. Ltd., a corporate debtor undergoing insolvency resolution. The application was filed by Mr. Mukesh Kakar, a real estate allottee holding a Memorandum of Understanding (MoU) with the corporate debtor, who objected to the plan on grounds of unfair classification and inadequate settlement.
The resolution plan, submitted by the resolution applicant M/s Siddharani Estate, proposed a one-time settlement amount of Rs. 15 crore for all unit holders who filed claims, with Rs. 12 crore allocated to allottees holding Builder Buyer Agreements (BBA) and Rs. 2 crore for those holding MoUs. Mr. Kakar contended this classification created an impermissible "class within a class," resulting in a disproportionate and prejudicial distribution that favored BBA holders at the expense of MoU holders like himself. He further alleged that the resolution plan lacked viability, feasibility, and a credible construction model, and raised concerns about a potential conflict of interest involving one of the resolution applicant's partners.
However, the NCLT relied heavily on the Supreme Court's ruling in Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd. (2022) and subsequent decisions by the NCLAT, which established that once a resolution plan is approved by the requisite majority of the Committee of Creditors (CoC) through an authorized representative, individual homebuyers cannot independently challenge the plan. The tribunal emphasized that the Code envisages homebuyers as a single class of financial creditors, and the vote of the authorized representative is binding on all members of the class, including dissenting individuals.
On the merits, the tribunal held that differential treatment between allottees holding BBAs and MoUs is not per se illegal or arbitrary. The distinction reflects the differing contractual rights and obligations under the respective agreements and is consistent with the principle that only similarly situated creditors are entitled to equitable treatment. Citing the NCLAT's judgment in Everlike Real Estate & Developers Pvt. Ltd. v. Mr. Mohit Goyal, the tribunal found that recognizing such classifications is permissible provided the distinctions are rational and founded on the nature of the underlying contracts.
Regarding the viability and feasibility objections, the tribunal reiterated the settled legal principle that the commercial wisdom of the CoC in approving a resolution plan is paramount and not subject to judicial second-guessing unless there is a demonstrable breach of the mandatory requirements under Section 30(2) of the Insolvency and Bankruptcy Code (IBC) or the CIRP Regulations. The tribunal noted that the applicant's objections essentially sought a fresh commercial assessment, which is beyond the tribunal's scope at the interlocutory stage.
On the alleged conflict of interest related to the familial and directorship ties between the resolution applicant and the landowner, the tribunal clarified that mere relationships or common directorships do not automatically trigger disqualification under Section 29A of the IBC unless specific disqualifications are demonstrated with material evidence. The tribunal held that such concerns are speculative and do not warrant rejection of the resolution plan or reopening of the bidding process.
In conclusion, the NCLT dismissed the application, affirming that the resolution plan was lawfully approved by the CoC and complied with the statutory framework under the IBC. The tribunal underscored that individual homebuyers are bound by the decision of their authorized representative, and objections not accepted at the CoC stage do not invalidate the resolution plan.
This judgment reinforces the legal position that the collective commercial wisdom of the CoC prevails in insolvency resolution processes and that classification within a creditor class is permissible when based on contractual differences. It also highlights the limited role of judicial intervention in matters of commercial assessment under the IBC.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Individual homebuyer/allottee has no independent locus to challenge a resolution plan after approval by requisite majority of CoC through authorised representative - Differential treatment between allottees holding Builder Buyer Agreements and those holding Memoranda of Understanding is not per se illegal if founded on nature of contractual rights - Objections relating to allocation, viability, feasibility and project structure fall within commercial wisdom of CoC unless violation of Section 30(2) of IBC or CIRP Regulations is shown.
Statutory provision(s):
Section 25A(3A), Section 29A, Section 30(2), Section 60(5) of the Insolvency and Bankruptcy Code, 2016; Regulations 37, 38 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
Mukesh Kakar v. Mr. Narendra Kumar Sharma, (NCLT)(New Delhi) : Law Finder Doc Id # 3001741
