Delayed Homebuyer Claim Cannot Be Rejected When RP Failed To Verify Records: NCLAT New Delhi

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) on 30 June held that a genuine homebuyer cannot be denied the benefit of an approved resolution plan merely because the homebuyer filed the claim belatedly, when the delay occurred due to the Resolution Professional's (RP) failure to identify and notify the homebuyer despite the corporate debtor's records reflecting the allotment.

Judicial Member Justice N Seshasayee and Technical Members Arun Baroka and Indevar Pandey allowed the appeal filed by Rajkumar and Shobha Jhawar and directed the Resolution Professional to admit their claim under Category A of the resolution plan as an addendum. The Bench observed:

“All Prospective Resolution Applicants have full access to the Virtual Data Room (VDR), as the Resolution plans are based on data made available in the VDR and Information Memorandum. We have seen from the affidavit of the RP that the VDR did have the details of the allocation of the flat in favour of the Appellants, still the same was not considered for inclusion in the Resolution plan. Non-inclusion of such claim reflected in CD's Records is due to lapse on the part of RP and SRA. The Appellants cannot be held responsible for the same.”

The appellants had entered into a registered Agreement to Sell dated 23 April 2012 for purchase of the flat for Rs. 42 lakh and had paid the entire consideration. However, the corporate debtor failed to hand over possession of the flat.

In September 2019, Capri Global Capital Ltd. initiated the Corporate Insolvency Resolution Process (CIRP) against Monarch Brookefields LLP. During the proceedings, the appellants claimed that they remained unaware of the insolvency process due to age-related ailments and the COVID-19 pandemic and filed their claim belatedly in June 2024.

The RP rejected the claim on the ground of delay. The appellants then approached the NCLT seeking exclusion of the flat from the resolution plan. After the NCLT dismissed their application, they filed an appeal before the NCLAT.

The appellants argued that they fell within Category A of the resolution plan and that the RP had acted arbitrarily by rejecting their claim while admitting the claim of Amit and Mini Kriplani, who relied only on unregistered allotment letters issued under a buy-back assured return scheme. They further argued that the RP introduced the Kriplanis' claim before the NCLAT without placing it before the NCLT and that the RP's contradictory statements regarding their payments showed negligence in processing their claim.

The RP and the Successful Resolution Applicant opposed the appeal and argued that the RP rightly rejected the appellants' claim because they filed it beyond the prescribed timeline. He defended the admission of the Kriplanis' claim by relying on allotment letters and banking records.

The NCLAT found contradictions in the RP's submissions. It noted that the RP had earlier informed the NCLT that the records did not contain details of the appellants' payments but later claimed before the NCLAT that discrepancies existed in the payments made by the appellants. It observed:

“These are two entirely inconsistent positions and demonstrate clear inefficiency and negligence on the part of the Resolution Professional. Further, RP had stated that communications were sent to all homebuyers but he could not produce a single document showing any communication to Appellants.”

The Bench further distinguished the appellants' claim from that of Amit and Mini Kriplani, who claimed rights over the same flat based on an unregistered reservation letter containing an assured return clause. It held that the appellants had entered into a registered Agreement to Sell, paid the entire consideration and consistently pursued possession of the flat, establishing them as genuine homebuyers entitled to Category A treatment under the resolution plan. It noted:

“The Kriplanis status on the other hand appears to be that of a speculative investor, who is only seeking return of money with interest and claims only “security” in the flat.”

Moreover, the Tribunal noted that the RP prepared the information memorandum based on the corporate debtor's books of accounts, records and information available in the VDR maintained by the Interim Resolution Professional. It observed that prospective resolution applicants relied on these records while preparing their resolution plans and that the VDR contained the appellants' flat allotment details, which the RP failed to include in the resolution plan. It further held:

“Further, the claim of the Appellants was rejected solely on the ground of delay without any due diligence by the RP. On the other hand, the claim of Mr. Amit Kriplani and his wife who are NRIs based in USA was admitted. The non-acceptance of claim of a genuine home buyer leads to inequitable and unfair resolution as is seen in the present case”

Accordingly, the NCLAT allowed the appeal, set aside the NCLT order and directed the RP to admit the appellants' claim under Category A of the resolution plan through an addendum.