Homebuyers Cannot Pursue Compensation Claims After Conveyance Deed Under Resolution Plan: NCLT Delhi

The Delhi Bench of the National Company Law Tribunal (NCLT) on 5 October held that homebuyers who execute conveyance deeds and take possession cannot pursue claims against a corporate debtor where the resolution plan expressly treats registration of the deeds as full and final settlement of all claims.

A Bench of Judicial Member Mahendra Khandelwal and Technical Member Atul Chaturvedi dismissed an application by Pankaj Gupta and Prachi Jain seeking recognition of their Rs. 41.80 lakh compensation claim as a financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC). It said:

“Thus, even assuming that the HRERA Order and Recovery Certificate had conferred upon the Applicants the status of decree-holders, the claim arising therefrom does not survive against the Corporate Debtor in view of the express terms of the Resolution Plan upon registration of the conveyance deed. The decree-holder status, therefore, cannot be relied upon to sustain any further claim against the Corporate Debtor.”

The applicants approached the Tribunal under Section 60(5) of the IBC, seeking directions to the Resolution Professional (RP) to admit and recognise their claim arising from an order passed by the Haryana Real Estate Regulatory Authority (HRERA), Gurugram, on 15 March 2022.

The HRERA order awarded interest and compensation for delay in handing over possession of their unit in the “Spaze Privy AT-4” project. A recovery certificate for Rs. 41.80 lakh was subsequently issued in August 2024.

After the corporate debtor entered the corporate insolvency resolution process (CIRP) in October 2024, the applicants submitted their claim to the Interim Resolution Professional. Their claim was initially included in the list of financial creditors under review. However, the RP subsequently declined to recognise them as financial creditors because a conveyance deed had been executed in their favour and advised them to submit their claim as operational creditors.

The applicants contended that they had executed the conveyance deed under protest in May 2025 as a precondition for obtaining possession, expressly reserving their rights to pursue remedies under the IBC and the Real Estate (Regulation and Development) Act, 2016 (RERA). They argued that the transfer of title could not extinguish their independent claim for compensation arising from delayed possession.

They also relied on an earlier application in which the RP's counsel had stated before the Tribunal that their claim would be accepted and treated in accordance with law. They submitted that they had withdrawn that application in reliance on the representation.

Further, they argued that the HRERA recovery certificate crystallised a financial liability qualifying as financial debt under Section 5(8) of the IBC. They also contended that similarly situated homebuyers who had not executed conveyance deeds continued to be recognised as financial creditors, making the denial of similar treatment to them discriminatory.

Opposing the application, the RP submitted that the applicants could not claim benefits beyond those provided under the CIRP and the resolution plan. The applicants had executed the conveyance deed on 29 May 2025 and obtained possession on 2 June 2025.

The RP relied on provisions of the resolution plan stipulating that registration of a conveyance deed in favour of an allottee would constitute full and final settlement of all monetary and other claims against the corporate debtor, with no further claims surviving thereafter.

He also argued that the applicants could not pursue independent recovery under the HRERA order and recovery certificate outside the resolution plan or override the commercial wisdom of the Committee of Creditors (CoC).

The Tribunal noted that the execution of the conveyance deed and acceptance of possession were undisputed and material to determining whether the applicants' claim continued to survive in the CIRP.

It held that the RP's earlier statement that the claim would be treated in accordance with law and the resolution plan did not amount to an adjudication granting the applicants an independent entitlement to payment of Rs. 41.80 lakh.

Further, the Bench held that the HRERA order and recovery certificate, even if they conferred decree-holder status on the applicants, did not establish a financial debt under Section 5(8)(f) of the IBC that would entitle them to treatment as financial creditors in the homebuyer class.

It emphasised that the resolution plan expressly provided that registration of the conveyance deed would constitute full and final settlement of all claims against the corporate debtor. Since the applicants had executed the deed and taken possession, their claim arising from the HRERA order and recovery certificate no longer survived against the corporate debtor.

Accordingly, the NCLT dismissed the application.