Homebuyers Can't Demand Other Creditors' Account Statements Over Suspected False Claims: NCLT Delhi

The Delhi bench of the National Company Law Tribunal (NCLT) has recently held that homebuyers, despite being financial creditors, cannot demand individual account statements of other creditors merely on suspicion that their claims may be false or inflated.

“The statutory obligation of the Resolution Professional is to receive, collate and verify claims in accordance with the Code and the Regulations and to maintain the relevant records for the purposes of the CIRP. The fact that the Applicants are themselves Financial Creditors does not confer upon them a right to conduct an independent audit of the individual financial affairs of every other creditor.If a specific claim is alleged to be false, inflated or otherwise ineligible, the same has to be established through cogent material and addressed in accordance with the statutory framework. A general demand for disclosure of all individual account statements cannot be granted merely on the basis of suspicion,” the tribunal ruled.

A coram of Judicial Member Mahendra Khandelwal and Technical Member Atul Chaturvedi passed the order.

The ruling came on an application filed by 20 homebuyers of the Spaze Arrow project seeking separate representation in the corporate insolvency resolution process (CIRP) of Spaze Towers Pvt. Ltd., a fresh forensic audit and disclosure of creditor-wise financial information. They also sought to secure ₹23 crore allegedly due to the original petitioners through the sale of the corporate debtor's former corporate office.

The CIRP against Spaze Towers began on October 21, 2024. The NCLAT rejected a plea to limit the proceedings to Spaze Arrow, a decision the Supreme Court upheld on January 2, 2025, while leaving other contentions open.

The homebuyers argued that Spaze Arrow was unlike the corporate debtor's other projects. While 12 of its 14 projects were physically complete, Spaze Arrow remained unfinished. They alleged that the company had lost its development rights and that regulatory issues persisted. Having paid the full consideration without receiving anything in return, they said their only recourse was through the insolvency estate.

The resolution professional argued that the IBC did not allow separate representatives for individual projects. Creditors had already selected Shaikh Nafis Anjum as their authorised representative. The CoC also approved a forensic audit by Kansal Singla & Associates. Covering April 2019 to October 2024, it found no transactions attracting specified IBC provisions, subject to the report's limitations.

The court held that the CIRP covered the company as a whole, not just Spaze Arrow.

It rejected the demand for project-wise representation, observing that the regulations provide for representation of a class of creditors through an authorised representative.

Regulation 16C provides for the appointment of a facilitator for a sub-class of creditors in certain circumstances. However, the applicants had not demonstrated compliance with the prescribed mechanism, the court observed.

On the demand for another forensic audit, the court noted that the CoC had already approved an audit and received the report. It ruled that a further audit could not be ordered repeatedly merely because the applicants wanted a more detailed, creditor-wise examination of payments and receipts.

“The difficulties faced by the allottees of Spaze Arrow may undoubtedly be substantial. However, the existence of project-specific difficulties does not, by itself, warrant creation of a separate representative structure or separate accounting mechanism contrary to the statutory framework of the CIRP,” the court observed.

The court also rejected the request to secure ₹23 crore allegedly due to the original petitioners through the sale of the corporate debtor's former corporate office. It held that a creditor could not claim exclusive rights over a particular asset unless a valid security interest or other statutory entitlement was established.

The court further observed that it could not direct the resolution professional to sell a particular asset and reserve the proceeds exclusively for a group of creditors merely because they claimed a specific amount was due to them. The corporate debtor's assets formed part of the insolvency estate and had to be dealt with under the IBC and the resolution process.

The application was dismissed.