NCLT Indore Rejects Homebuyer's Claim Filed 1.5 Years After Resolution Plan Approval In JSM Devcons CIRP

The Indore bench of the National Company Law Tribunal (NCLT) has rejected a homebuyer's plea for possession of a flat, holding that a claim filed nearly eighteen months after approval of the resolution plan cannot be entertained.

Observing that permitting such belated claims would disrupt the resolution process, the bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta held,

“The Successful Resolution Applicant takes over the Corporate Debtor on the basis of the liabilities crystallized in the approved Resolution Plan and therefore permitting additional claims at a later stage would fundamentally alter the commercial framework of the plan”

The application was filed by Dilip Yadav, a homebuyer, against Chaya Gupta, Resolution Professional of JSM Devcons Private Limited, and Devvrat Developers Private Limited, the Successful Resolution Applicant.

Yadav had purchased Flat No. 405 in Premium Tower 2 of the “Pinnacle D Dreams” project at Indore and paid the entire sale consideration of Rs 42,85,600. However, he did not file his claim during the Corporate Insolvency Resolution Process (CIRP) initiated against the corporate debtor in 2022. The resolution plan submitted by Devvrat Developers Pvt. Ltd. was approved on April 5, 2024 and covered 351 homebuyers.

Yadav said he was living outside Indore at the time and had no knowledge that CIRP proceedings had been initiated, which is why he missed the deadline to file his claim. He maintained that having paid the entire sale consideration, he qualified as a bona fide purchaser and should have been recognised as a financial creditor, with his claim reflected in the Information Memorandum.

Opposing the plea, the Successful Resolution Applicant submitted that the claim was a belated attempt to reopen a concluded process, describing it as a “sudden popping up of hydra heads.”

It was argued that Yadav had failed to submit any claim despite public announcements inviting claims and could not seek relief after approval of the resolution plan.

The SRA also invoked the principle that the law comes to the aid of those who remain vigilant about their rights, not those who fail to act in time.

The Tribunal, for its part, underscored that the IBC framework places the onus on all creditors, including homebuyers, to submit their claims within the prescribed window so they can be properly verified and factored into the resolution process. It also pointed out that the decisions cited by the applicant did not apply here, noting that in those cases the resolution plans were still pending approval before the Adjudicating Authority.

In contrast, the present claim was filed about 1.5 years after approval of the resolution plan. The Tribunal held that once a resolution plan is approved, it becomes binding on all stakeholders and that claims not forming part of the plan cannot be considered thereafter.

The bench further observed,

"Further, it is pertinent to note that the CIRP is a "time-bound process." Section 12 of the IBC, 2016 mandates a 330-day outer limit. In the present case, the Applicants filed their claims after a delay of several years. To condone such an exorbitant delay, especially when the plan has been approved by the CoC and the Adjudicating Authority, would violate the sanctity of the process.”

Emphasising finality, the tribunal noted that allowing such claims would defeat the objective of the Code and render implementation of the resolution plan uncertain and unworkable.

Holding that such belated claims cannot be permitted, the tribunal dismissed the application.