NCLT Delhi Holds Homebuyers' Payments Are Financial Debt, Admits ₹137 Cr Plea In Raheja's Revanta Project

The New Delhi National Company Law Tribunal (NCLT) on 8 June held that homebuyers' payments towards a real estate project constitute financial debt under Section 5(8)(f) of the Insolvency and Bankruptcy Code (IBC).

President Justice Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi admitted a Section 7 petition filed by 176 allottees of Raheja Developers' Revanta project seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the developer. The Bench observed:

“The pendency of any proceedings before HRERA or NCDRC does not create any bar against initiation of CIRP under the Code. The remedies available under the Code are independent and concurrent in nature.”

Raheja Developers launched the Revanta project in 2011 and promised possession within 36 months for independent floors and 48 months for three high-rise towers. The 176 homebuyers holding 99 units in the project paid substantial amounts, with many paying up to 90–95% of the sale consideration. The developer, however, failed to complete the project even after the extended deadline of July 2022.

The petitioners submitted that the developer received over Rs 137 crore from them and around Rs 826 crore overall but did not deliver possession. They pointed out that the Haryana Real Estate Regulatory Authority (HRERA), in January 2023, passed orders directing refunds with interest.

Settlement agreements acknowledging delay and promising compensation were also executed but were not complied with, and by February 2024, the developer became liable to refund over Rs 212 crore including interest.

The developer contended that delays arose due to external infrastructure deficiencies such as roads, sewerage, electricity, and approvals from government authorities, which remained beyond its control.

It further argued that execution proceedings before the National Consumer Disputes Redressal Commission (NCDRC) and freezing of bank accounts adversely impacted its financial functioning. Raheja Developers also submitted that insolvency proceedings would prejudice around 40,000 homebuyers across 35 projects and asserted that it remained solvent and financially viable.

The homebuyers countered that the project remained incomplete for over 13 years despite substantial payments and alleged diversion of funds, including creation of liens in favour of Edelweiss Asset Reconstruction Company (EARCL). They also submitted that HRERA proceedings do not bar initiation of insolvency proceedings under the IBC.

The Tribunal held that the Section 7 threshold stood satisfied as the application was filed by more than 100 allottees and that homebuyers' payments constitute financial debt under Section 5(8)(f) of the IBC.

It further held that the developer failed to deliver possession within contractual timelines despite receiving substantial consideration and that HRERA orders and settlement agreements confirmed default. It rejected the force majeure defence.

On parallel proceedings, the Bench held that proceedings before HRERA or NCDRC do not bar insolvency proceedings under the IBC. It confined the CIRP to the Revanta project relying on NCLAT rulings in Raheja Shilas and Krishna Housing Scheme. It dismissed EARCL's intervention application, observing:

“It is a settled law that at the stage prior to admission, no party other than the financial creditors, being the Petitioner and the CD, is necessary and/or proper. As per section 7, a financial creditor can only join as the petitioners, and no such other way of intervention in the petition at the stage of admission itself can be allowed.”

Accordingly, the NCLT admitted the Section 7 petition and imposed a moratorium.

For Petitioners: Advocates Sumesh Dhawan, Vivek Kumar, Raveena Paniker, Varsha Mohanty, Arunima Ganguly, Kavya Tekriwal and Akshay Srivastava

For Respondents: Senior Advocate P Nagesh with Advocates Manmeet Kaur, Jai Dogra and Kholi Rakuzhuro