NCLT New Delhi Dismisses Vatika One On One Insolvency Plea, Holds Assured Returns Not Operational Debt

The New Delhi National Company Law Tribunal (NCLT) on 23 July held that claims for assured returns and lease rentals under Builder Buyer Agreements do not qualify as “operational debt” under the Insolvency and Bankruptcy Code, 2016 (IBC), and that individual claims must meet the statutory threshold of Rs. 1 crore under Section 4 of the Code.

A Bench of Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Reena Sinha Puri dismissed an insolvency petition filed against Vatika One On One Pvt. Ltd., holding that the claims arose from real estate investment agreements and did not fall within the statutory definition of operational debt. It observed:

“The claim is also not in the nature of employment dues or statutory dues payable to the Government or a local authority. The claim of the Applicants arises out of non-payment of assured monthly returns and lease rentals under the Builder Buyer Agreements. Such claim does not fall within the statutory definition of “operational debt” under Section 5(21) of the Code.”

Harsh Vardhan Krishnatray, Tanuja Krishnatray and Radhika Krishnatray had filed the application as Operational Creditors seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Vatika One On One Private Limited, the Corporate Debtor.

The Corporate Debtor, a group company of Vatika Limited, approached the Applicants between 2014 and 2016 to invest in three commercial units in its project, each measuring 500 sq. ft. of super area.

The Applicants received brochures offering assured monthly returns of Rs. 151.65 per sq. ft. until completion of construction, followed by assured lease rentals of Rs. 130 per sq. ft. for three years or until the units were leased, as applicable.

Tanuja Krishnatray and Radhika Krishnatray purchased two units by making full payments of Rs. 42,77,955 each. Subsequently, Harsh Vardhan Krishnatray and Tanuja Krishnatray jointly invested in another commercial unit for a total consideration of Rs. 45,84,618. The parties consequently executed three Builder Buyer Agreements.

The Corporate Debtor paid the assured returns until September 2018, after which it defaulted. The Applicants alleged that the Corporate Debtor leased their units to Air India in 2024 without executing conveyance deeds or paying the lease rentals.

The Applicants approached the Haryana Real Estate Regulatory Authority (HRERA), which passed orders directing the Corporate Debtor to pay the assured returns and lease rentals. Recovery certificates were also issued, but the amounts remained unpaid. Then applicants jointly claimed Rs. 1.81 crore, including interest, and served a demand notice in November 2025. After the Corporate Debtor neither replied to the notice nor made payment, the Applicants filed the Section 9 petition.

The Bench noted that Section 5(21) of the Code defines operational debt as a claim arising from the provision of goods or services, including employment, or a debt arising under a statutory obligation. It held that the Applicants' claims arose from real estate investment agreements providing for assured returns and lease rentals and therefore did not fall within this definition.

Relying on Nikhil Mehta & Sons v. AMR Infrastructure Ltd., the Tribunal observed that claims arising from such agreements are more akin to financial debt than operational debt.

It further held that a Section 9 petition requires each Operational Creditor's claim to individually satisfy the Rs. 1 crore threshold prescribed under Section 4 of the Code. It noted that Radhika Krishnatray's claim amounted to only Rs. 60.38 lakh, while the individual claims of the other Applicants could not be clearly ascertained from the material placed on record. It held:

“However, even on the basis of the available record, it is evident that their individual claims would not meet the threshold of Rs. 1 crore prescribed under Section 4 of the Code.

In view of the judgments referred to above, the Applicants cannot club their separate claims to meet the statutory threshold under Section 4 for maintaining a Section 9 petition. Since the threshold is not met individually, the present Petition is not maintainable on this ground as well.”

Accordingly, the NCLT dismissed the petition, holding that the claims neither constituted operational debt nor individually met the statutory threshold required to maintain a Section 9 petition.

APPLLICANTS ADVOCATE/ PROFESSIONAL: Senior Advocate Ashish Mohan with Advocates Vivek Singh Bishnoi, Ankur Bansal, Sadre Alam and A. Mukherjee