NCLT Allahabad Confirms Flat Possession To Renaissance Realty, Orders ₹1 Crore To JAL Insolvency Estate

The Allahabad Bench of the National Company Law Tribunal (NCLT), while deciding an application filed by Renaissance Realty, acknowledged that the applicant had already received possession of a flat in the Jaypee Greens Kalypso Court project.

A Bench of Judicial Member Praveen Gupta and Technical Member Ashish Verma also ordered that Rs. 1 crore recovered under RERA proceedings be returned to the insolvency estate of JAL. It observed:

“In the circumstances of the present case, since the possession of the said unit has been granted and the claim to the extent permissible has already been admitted, permitting the Applicant to appropriate or retain the amount of Rs. 1 Crore would result in preferential recovery by one allottee in disregard of the collective insolvency mechanism contemplated under the Code, and therefore the aforesaid amount is liable to be refunded to the Corporate Debtor.”

Renaissance Realty filed the application against Bhuvan Madan, the Resolution Professional (RP) of JAL.

JAL launched a group housing project named “Jaypee Greens Kalypso Court.” Renaissance Realty booked Unit No. KLP0082402 in Phase-II of the project and paid more than Rs. 4.84 crore. JAL was required to hand over possession by December 2015 but failed to do so.

Renaissance Realty approached UP RERA, which on 6 October 2020 directed JAL to hand over possession by September 2021 and pay delayed interest at MCLR + 1%. JAL did not comply with the order. UP RERA therefore issued a recovery certificate on 1 March 2024 to recover the delayed interest.

Since the District Magistrate delayed the execution of the recovery certificate, the applicant filed a Civil Mis. Writ Petition before the Allahabad High Court. Pursuant to directions of the High Court, authorities recovered Rs. 1 crore from JAL and transferred the amount to the applicant.

Meanwhile, authorities admitted JAL into the Corporate Insolvency Resolution Process (CIRP) in June 2024. Renaissance Realty filed a claim as a financial creditor for Rs. 8.57 crore, but the RP admitted the claim only to the extent of Rs. 68.25 lakh. The RP also demanded additional payment for execution of the sub-lease deed.

The applicant submitted that it had made all payments demanded by the RP. However, despite repeated reminders, the RP did not hand over possession and did not execute the sub-lease deed. The applicant also denied allegations of fraud in receiving Rs. 1 crore and stated that authorities released the amount before commencement of the CIRP.

The applicant further submitted that the developer had granted registry and possession to other homebuyers in the same project but had deprived the applicant of its unit.

The RP contended that JAL had already offered possession in September 2022, but the applicant focused on recovering delay interest instead of completing the required pre-possession formalities. The RP also argued that the Rs. 1 crore recovered under RERA formed part of the corporate debtor's assets and must revert to the insolvency estate under Sections 14 and 18 of the Insolvency and Bankruptcy Code.

In December 2025, the Tribunal directed the applicant to deposit Rs. 1 crore with the Tribunal registry. The RP agreed to hand over possession upon such deposit. The applicant complied with the direction, and the RP subsequently handed over possession.

The Tribunal noted that the primary relief of possession had already been satisfied. The only remaining issue was whether the applicant could retain the Rs. 1 crore recovered under the RERA proceedings.

It further held that allowing the applicant to retain the amount would result in preferential recovery by one allottee and would undermine the collective insolvency mechanism under the Insolvency and Bankruptcy Code.

The Bench directed the registry to release the Rs. 1 crore deposited with it, along with accrued interest, to the RP so that the amount forms part of the insolvency estate of JAL. The Tribunal also recorded that the RP had admitted the applicant's claim to the extent of Rs. 68.25 lakh, subject to the approved resolution plan.

Accordingly, the Tribunal disposed of the application.

For Appellants: Advocate Yash Tandon

For Respondents: Advocates Dr Farrukh Khan, Dinkar Tiwari and Khushboo Sai Khurana