Individual Creditor Cannot Reopen CIRP Over Individual Grievances Outside IBC Procedure: NCLT Delhi

The National Company Law Tribunal (NCLT), Delhi, has ruled that an individual homebuyer cannot seek to reopen insolvency proceedings against a company based on personal grievances by bypassing the procedures prescribed under the Insolvency and Bankruptcy Code (IBC).

“Therefore, an individual creditor cannot seek to bypass the procedure prescribed under the Code and the Regulations and seek orders which would have the effect of altering or re-opening the CIRP merely on the basis of his individual grievances,” the bench of Judicial Member Mahendra Khandelwal and Technical Member Atul Chaturvedi observed.

The tribunal dismissed an application filed by Dr. Sudip Saran, a homebuyer in Spaze Towers Pvt. Ltd.'s Spaze Apotel/Boulevard-II project. Saran claimed to have paid ₹94.38 lakh for an apartment but never received possession.

After insolvency proceedings began against the company in October 2024, the resolution professional (RP) admitted ₹92.14 lakh of his claim. The RP subsequently rejected the remaining ₹2.24 lakh because the company's records did not reflect receipt of that amount.

Saran challenged the rejection and alleged that the RP had also failed to account for interest, affecting his voting share in the Committee of Creditors (CoC). He further accused the RP and the authorised representative (AR) of failing to share notices, meeting minutes, and other documents relating to the insolvency proceedings.

He sought their removal, disciplinary action, a fresh resolution process and a transactional or forensic audit of the company.

The RP maintained that the admitted amount was supported by the company's records. The AR, meanwhile, contended that notices and meeting minutes had been sent to Saran's email address available in the records.

The tribunal held that Saran could not seek the RP's removal by bypassing Section 27 of the IBC. The provision requires the CoC to approve a replacement by at least 66% of the voting share.

It also rejected his request to remove the AR. Under Regulation 16A(3A) of the CIRP Regulations, financial creditors representing at least 10% of a class's voting share can initiate the prescribed process to replace their AR. Saran had approached the tribunal individually without demonstrating that this procedure had been followed.

On the disputed claim, the tribunal observed that an RP must verify claims against the corporate debtor's available records. An RP does not have the authority of a court to adjudicate disputed facts or contractual claims. Since the company's records did not reflect receipt of the disputed amount, the tribunal found no material to conclude that the RP had exceeded his statutory role.

The tribunal also found that the material did not establish that Saran had been deliberately excluded from the insolvency process. The respondents maintained that relevant communications had been sent to his email address. The tribunal held that his assertion that he had not received or accessed certain communications was insufficient to establish deliberate exclusion.

“The Applicant, being a member of the class of creditors represented through the Authorised Representative, is required to participate in the collective mechanism prescribed under the Code. The statutory scheme does not contemplate that every individual member of a class can independently challenge the collective process and seek re-conduct of the CIRP,” the bench observed.

The tribunal also rejected Saran's allegations of collusion between the RP and AR, finding no evidence to substantiate them. It held that an earlier disciplinary order imposing a penalty on the RP did not, by itself, establish misconduct in the present CIRP.

It declined to order a fresh resolution process, finding no fundamental illegality that would justify reopening the CIRP. It also rejected the request for an audit, as Saran had not provided specific material warranting such a direction.

Subsequently, The tribunal dismissed the application.