Belated Homebuyer Claims Cannot Reopen Approved Resolution Plan: NCLT Indore

The Indore Bench of the National Company Law Tribunal (NCLT) has held that a homebuyer's claim cannot be recognised after approval and implementation of a Resolution Plan, as entertaining such a belated claim would undermine the finality of the approved plan.

Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta dismissed an application filed by Nishkarsh Kumar under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) read with Rule 11 of the NCLT Rules, 2016, seeking recall of the order approving the Resolution Plan of JSM Devcons Private Limited. The Bench observed:

“In view of the above discussion this Adjudicating Authority is of the considered view that the present application seeking recognition of the Applicant's claim after the conclusion of the CIRP cannot be entertained. The Applicant failed to submit his claim during the CIRP despite the public announcement inviting claims and has approached this Tribunal only after the Resolution Plan has been approved and implemented. Such belated claims cannot be permitted as they would undermine the finality attached to an approved Resolution Plan under the Insolvency and Bankruptcy Code.”

Kumar sought recall of the Tribunal's 5 April 2024 order approving the Resolution Plan, besides seeking recognition of his claim and a stay on its implementation.

He claimed to be the allottee of Unit No. 1502 in Premium Tower 8 and stated that he had paid the entire sale consideration of Rs. 19,13,043. He contended that he was unaware of the Corporate Insolvency Resolution Process (CIRP) as he was residing outside Indore and therefore could not submit his claim within the prescribed period.

Kumar further argued that his details were available in the Corporate Debtor's records and ought to have been considered by the Resolution Professional. He also alleged irregularities in the Resolution Plan, including suppression of material facts, undervaluation of assets and non-compliance with the IBC and CIRP Regulations. He relied upon Puneet Kaur v. K V Developers Pvt. Ltd. and Greater Noida Industrial Development Authority v. Prabhjit Singh Soni.

Opposing the application, the Successful Resolution Applicant submitted that the Resolution Plan had already been approved and that Kumar had failed to submit any claim despite public announcements. It stated that the plan covered claims of 351 homebuyers and that entertaining a belated claim would prejudice stakeholders who had participated in the CIRP.

The Tribunal noted that Form-G had been published thrice and rejected Kumar's plea that he lacked knowledge of the CIRP. It observed that he had “wilfully ignored and lost sight of the CIRP” and could not seek to disturb the approved Resolution Plan at such a belated stage.

The Bench distinguished the judgments relied upon by Kumar, noting that those cases concerned Resolution Plans which had not yet been approved. In the present case, the Resolution Plan was approved on 5 April 2024 and became binding under Section 31 of the IBC.

Relying on the principles laid down by the Supreme Court in Essar Steel and RPS Infrastructure, it held that claims not crystallised before approval of a Resolution Plan could not subsequently be reopened. It also invoked the maxim “Vigilantibus Non Dormientibus Jura Subveniunt”, meaning that the law assists those who are vigilant about their rights and not those who sleep over them.

Accordingly, the NCLT held that allowing a fresh claim after approval of the Resolution Plan would render it uncertain and unworkable and fundamentally alter the commercial framework on which the Successful Resolution Applicant had taken over the Corporate Debtor.