RERA Cases under IBC/Insolvency

Can Resolution Professional/CoC revise maintenance fees and recovery of electricity dues from Allottees during the Real Estate Insolvency? | Whether payment of electricity charges being an essential service, such amount can be accounted towards CIRP costs and that the Corporate Debtor is not liable to pay the amount till the completion of the period of moratorium? – Sanskriti Allottee Welfare Association (Reg.) and Anr. Vs. Gaurav Katiyar RP Earthcon Universal Infratech Pvt. Ltd. and Anr. – NCLAT New Delhi

In this important judgment, Hon’ble NCLAT clarified following issues:

A. Is NCLAT/NCLT the competent forum to consider whether the association of allottees constituted or not?
B. Is it appropriate on the part of the RP to seek the approval of the CoC in the determination of maintenance fees and recovery of electricity dues?
C. Can after having been present Authorised Representative of allottees in the CoC meetings and exercised their voting rights, the allottees question the authority of the CoC to have made some business decisions?
D. Whether payment of electricity charges being an essential service, such amount can be accounted towards CIRP costs and that the Corporate Debtor is not liable to pay the amount till the completion of the period of moratorium

Can Resolution Professional/CoC revise maintenance fees and recovery of electricity dues from Allottees during the Real Estate Insolvency? | Whether payment of electricity charges being an essential service, such amount can be accounted towards CIRP costs and that the Corporate Debtor is not liable to pay the amount till the completion of the period of moratorium? – Sanskriti Allottee Welfare Association (Reg.) and Anr. Vs. Gaurav Katiyar RP Earthcon Universal Infratech Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Can CoC fix different eligibility criteria for Association of Allottees as compared to other Resolution Applicant? – Crown Business Park Tower A Buyers Association, Faridabad Vs. Atul Kansal and Ors. – NCLAT New Delhi

In this important judgment, Hon’ble NCLAT held that:

(i) Interference in the Resolution Plan by the Adjudicating Authority is permissible when the Resolution Plan violated the provisions of Section 30(2) and the Plan does not conform to requirements as referred to in Section 30(2).
(ii) Regulation 36A (4) of the CIRP Regulations provides that CoC is empowered to specify eligibility. The expression “specify the criteria for prospective resolution applicants”, cannot be read to mean that criteria for all prospective Resolution Applicants has to be same.
(iii) Criteria cannot be discriminatory but reasonable rational classification is not prohibited.

Can CoC fix different eligibility criteria for Association of Allottees as compared to other Resolution Applicant? – Crown Business Park Tower A Buyers Association, Faridabad Vs. Atul Kansal and Ors. – NCLAT New Delhi Read Post »

Whether Homebuyers who entered in a separate agreement for providing Monthly Assured Return are also required to meet threshold criteria as per second proviso to Section 7(1) of IBC – Rita Malhotra and Anr. Vs. Orris Infrastructure Pvt. Ltd. – NCLAT New Delhi

In this case, the Corporate Debtor had entered into an Agreement with the Appellants on 24.04.2010 (MOU) for providing Monthly Assured Return (MAR).

The Appellants submitted that the present application has not been filed for default by real estate developer under terms of allotment but for reasons of default under an independent and separate agreement executed between the two parties for MAR.

Hon’ble NCLAT held that:

(i) On a plain reading of the provisions contained in the definition clause under RERA Act, a commercial space/unit allottee is covered under the purview of ‘allottee’ under RERA Act.
(ii) Assured Returns Class of Creditors, they continue to belong to the substratum of ‘allottees’ and therefore continue to be governed by the threshold limit prescribed under second proviso to Section 7(1) of IBC.
(iii) The Appellants cannot be said to go out of the definition of ‘allottees’ merely because they are part of MAR plan or that they should be treated in a different category wherein they are not required to comply with second proviso to Section 7(1).

Whether Homebuyers who entered in a separate agreement for providing Monthly Assured Return are also required to meet threshold criteria as per second proviso to Section 7(1) of IBC – Rita Malhotra and Anr. Vs. Orris Infrastructure Pvt. Ltd. – NCLAT New Delhi Read Post »

Test of genuine Homebuyers v/s Speculative Homebuyers is relevant only at the stage for the admission of CIRP under Section 7 of the IBC – Everlike Real Estate & Developers Pvt. Ltd Vs. Mr. Mohit Goyal, CA RP of Aadi Best Consortium Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) The Code or the RERA Act, 2016 do not differentiate anywhere between the Homebuyers who purchase units for his own consumption or the Homebuyers or unit purchaser who purchase the multiple units for commercial purposes.
(ii) The issue regarding the genuine Homebuyers v/s Speculative Homebuyers is relevant only at the stage for the admission of CIRP under Section 7 of the Code.
(iii) It becomes clear that whether the homebuyer/ allottee is genuine homebuyer or genuine allottee or speculative homebuyers/ allottee but if he has paid the money for acquisition of such properties or given the advance, such allottee/ homebuyer shall be treated as Financial Creditor in terms of Section 5(8)(f) of the Code.
(iv) No individual homebuyers has any locus to challenge resolution plan if the Resolution Plan which has been approved by voting of more than 50% of voting shares of homebuyers as a class.

Test of genuine Homebuyers v/s Speculative Homebuyers is relevant only at the stage for the admission of CIRP under Section 7 of the IBC – Everlike Real Estate & Developers Pvt. Ltd Vs. Mr. Mohit Goyal, CA RP of Aadi Best Consortium Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Is it number of allottees and not the number of financial creditors relevant for fulfilling the threshold under Section 7 of IBC – Harinder Bashista Vs. Sanjib Kumar and Ors. – NCLAT New Delhi

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Is it number of allottees and not the number of financial creditors relevant for fulfilling the threshold under Section 7 of IBC – Harinder Bashista Vs. Sanjib Kumar and Ors. – NCLAT New Delhi Read Post »

Issue of claim filed in CIRP against payment made in Cash by Homebuyer, claim rejected by RP and upheld upto NCLAT – Devesh Raminklal Thakker Vs. Arun Kapoor – NCLAT New Delhi

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Issue of claim filed in CIRP against payment made in Cash by Homebuyer, claim rejected by RP and upheld upto NCLAT – Devesh Raminklal Thakker Vs. Arun Kapoor – NCLAT New Delhi Read Post »

NCLAT directs that IRP shall not impose any freeze on the account which are under the RERA direction – Vinod Kumar Jha, Directors (Powers Suspended) of Ajnara Realtech Ltd. Vs. Sachin Dhiman and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that it is for the RERA to take appropriate steps and further directions if there is any non-compliance of the RERA direction. Insofar as the projects which are not covered by the order of the RERA dated 30.06.2023, construction shall be carried out under the supervision of the IRP with the assistance of the promoters, directors, staff and employees. We are also of the view that for carrying out the construction which are covered by RERA direction, IRP shall not impose any freeze on the account which are under the RERA direction.

NCLAT directs that IRP shall not impose any freeze on the account which are under the RERA direction – Vinod Kumar Jha, Directors (Powers Suspended) of Ajnara Realtech Ltd. Vs. Sachin Dhiman and Anr. – NCLAT New Delhi Read Post »

Whether Claim against services of publication of advertisement in newspapers can be admitted in the category of Home Buyers (as Financial Debt) in case where Real Estate Company agreed to give possession over Flats by way of a Barter Agreement – Rajasthan Patrika Pvt. Ltd. Vs. Chaya Gupta RP of JSM Devcons Pvt. Ltd. – NCLT Indore Bench

The applicant had provided the services of publication of the advertisement in its newspaper Instead of making cash payment, the corporate debtor had agreed by way of the Barter Agreement to pay it towards the services so provided by way of giving the possession over the said two flats in the project. By virtue of that Barter agreement, the applicant could have been the rightful owner of those two flats but in the case when the project has not been completed, the flats were not physically handover, and the CIRP has been initiated in the case of the Corporate Debtor, the only legitimate option available to the applicant could be by way of filing its claim as operational creditor only.

Whether Claim against services of publication of advertisement in newspapers can be admitted in the category of Home Buyers (as Financial Debt) in case where Real Estate Company agreed to give possession over Flats by way of a Barter Agreement – Rajasthan Patrika Pvt. Ltd. Vs. Chaya Gupta RP of JSM Devcons Pvt. Ltd. – NCLT Indore Bench Read Post »

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