The Supreme Court on Tuesday upheld the National Company Law Appellate Tribunal's refusal to grant relief to an allottee of a Jaiprakash Associates Ltd. project, who had sought refund of around ₹4 lakh demanded from him towards common area charges after he had taken possession of his unit.

A Bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V. Mohana after hearing the case, refused to interfere with the NCLAT order dated May 14, 2026.

Counsel appearing for the allottee submitted that the allotment terms contemplated completion of the flat within 36 months and argued that the claim had been rejected essentially because possession had already been taken. He submitted:

“They said because we have taken possession, therefore we will not consider. And in fact, we have taken the house.”

Counsel further argued that the allottee's claim should not be prejudiced merely because he had accepted possession and that the amount paid during the CIRP could be refunded or adjusted.

The Bench however, examined the practical consequence of enhancing the allottee's claim under the resolution plan. The Court asked, “How much will you get in the waterfall?”

The Court noted that even if the claim were enhanced, the allottee would have to compete in the waterfall mechanism under the resolution plan and the IBC.

The Bench observed that the allottee had already accepted possession after paying the additional amounts and obtaining the necessary documentation. It questioned whether pursuing the refund claim would ultimately provide any meaningful benefit. The Court remarked,

“That was a workable situation for resolution of the entire CIRP process. It won't be so, so insistent on contractual compliances.”

The Bench further observed that the allottee was in a relatively advantageous position because he had obtained possession of the property, stating, “If you are happy, you are better, you have a roof over your head. And you are one of the lucky ones.”

Counsel submitted that the NCLT had erred in holding that it could not adjudicate contractual claims during the insolvency process. The Court however, indicated that even if that reasoning was legally questionable, the practical outcome of allowing the claim would not necessarily benefit the allottee.

The Bench observed that the Resolution Professional had modified the allotment terms to accommodate as many allottees as possible and that the appellant had paid the additional amount, albeit under protest, before taking possession.

Explaining the consequences under the waterfall mechanism, the Court said,

“This company is not in CIRP, it is in liquidation, it will go to Section 53. You will not be permitted as a homebuyer, financial creditor, because you have already been given the home, you will be an unsecured creditor.”

The Bench therefore questioned the utility of directing consideration of an enhanced claim when the amount would rank at the bottom of the waterfall.

Counsel for the allottee maintained that his claim was relatively small and that he was not seeking to disturb the resolution plan, but only wanted the amount paid by him to be recognised. 

“My claim is small and it's not a big one and I'm fighting a bigger one. So that doesn't mean that my rights are to be jeopardised.”, the counsel said. 

The Bench nevertheless cautioned against pursuing what it considered a potentially fruitless exercise. It observed, “We don't want you to go for and use a fruitless exercise in which ultimately you will not gain anything.”

The Supreme Court dismissed the allottee's appeal, thereby leaving undisturbed the rejection of his claim for refund of the additional common-area charges.

Background

The appeal was filed by the appellant Devendra Singh Yadav before the NCLAT against Bhuvan Madan, Resolution Professional of Jaiprakash Associates Ltd. (JAL), challenging the NCLT Allahabad Bench's March 17, 2026 dismissal of an interlocutory application.

The application sought refund of amounts demanded from him. The matter arose during JAL's CIRP in which Adani Enterprises Ltd.'s resolution plan was approved by the CoC with 93.81% votes, providing for an overall payout of about ₹14,543.40 crore.

Yadav, an allottee in one of JAL's projects, had already taken possession of his unit and obtained a registered sub-lease. He challenged a ₹4 lakh demand towards common-area charges, claiming it was not part of his allotment terms. The RP argued that Yadav had accepted the possession demand, paid the amount and furnished the required documents before taking possession.

The NCLAT held that after accepting possession and payment, Yadav could not subsequently seek a refund. Any objection ought to have been raised before possession and registration. The Tribunal therefore dismissed the appeal.

Click Here To Read/Download NCLAT Order


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Case Title :  DEVENDRA SINGH YADAV AND ANR. vs BHUVAN MADAN AND ANR.Case Number :  C.A. No. 9798/2026