NCLAT Says NCLT Must Decide Homebuyers' AR Replacement Plea Immediately, Excludes Waiting Period From CIRP

The National Company Law Appellate Tribunal (NCLAT) has recently ruled that the National Company Law Tribunal (NCLT) must immediately decide an application seeking replacement of the Authorised Representative (AR) of homebuyers once the Committee of Creditors (CoC) has approved the change.

It has also excluded the period spent waiting for a decision on the application from the Corporate Insolvency Resolution Process (CIRP) timeline.

A Bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Naresh Salecha observed:

“Therefore, in our considered opinion, when the existing Authorised Representative of the creditors in class was non-cooperating with the resolution of the CD, and the CoC has taken a decision to change the Authorised Representative and has moved an application in this regard, the said application should have been decided immediately by the Adjudicating Authority.”

The appeal was filed by Resolution Professional Manindara Kumar Tiwari of Real Tech Constructions Pvt. Ltd. He challenged an NCLT order refusing to exclude the period from May 1, 2026, until the disposal of his application seeking replacement of the existing AR.

The dispute arose after financial creditors in the homebuyers' class raised concerns about their AR's conduct. On April 14, 2026, creditors representing more than 10% of the voting share sought his replacement, alleging non-cooperation in the insolvency proceedings and obstruction of the voting process.

The CoC approved the replacement on May 1, 2026, and selected Rajiv Khurana as the new AR. The RP subsequently approached the NCLT for approval, but the application remained pending.

The RP argued that the delay had stalled crucial stages of the CIRP requiring the CoC's participation. He submitted that the creditors had lost confidence in the existing AR and had exercised their statutory right to seek replacement. The delay, he argued, was not attributable to the RP or the CoC.

The NCLAT noted that Regulation 16A(3A) of the CIRP Regulations allows financial creditors in a class representing at least 10% of the voting share to seek replacement of their AR. Since the CoC consisted entirely of financial creditors in a class, the AR's role was particularly important.

The tribunal held that the NCLT should have immediately decided the replacement application. It also noted that the project was almost complete, with only minor work remaining, and involved hundreds of homebuyers. Liquidation at this stage would not serve stakeholders' interests, it observed.

Setting aside the NCLT's order, the NCLAT excluded the period from May 1, 2026, until the adjudication of the replacement application from the CIRP timeline. It also requested the NCLT to decide the application at the earliest.