NCLT Chennai Cancels Sale Deed Of Homebuyer Who Failed To Submit Claim During CIRP

The National Company Law Tribunal (NCLT), Chennai, has recently cancelled a homebuyer's registered Sale Deed and Construction Agreement after he failed to file a claim during the corporate insolvency resolution process (CIRP) of P Dot G Constructions Private Limited.

He also failed to submit a claim during a 60-day window provided after approval of the resolution plan.

Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam observed that the homebuyer could not stand outside the resolution plan after failing to file a claim on either occasion.

The court held, “the Respondent had not filed any claim form before the IRP during the CIR Period.” It noted that Clause 4.4(xv) of the approved resolution plan gave homebuyers whose claims were not filed or had been rejected a further 60 days to approach the Successful Resolution Applicant. The respondent did not file a claim during this period either.

The homebuyer had entered into a Construction Agreement dated February 11, 2016, followed by a registered Sale Deed dated February 12, 2016. He claimed that he had paid the entire consideration and obtained possession of the flat.

He claimed to have paid ₹22 lakh towards construction by cheque in September 2014 and ₹1,37,508 in cash in February 2016. The corporate debtor, however, maintained that no claim had been filed during the CIRP or the subsequent 60-day window.

The NCLT also found that the Sale Deed acknowledged only ₹2.88 lakh towards the undivided share of land. It did not acknowledge payment of the remaining ₹18,15,588 towards the property described in Schedule B of the deed.

There was also no acknowledgement from the corporate debtor for the alleged ₹1,37,508 cash payment. The court therefore held that the respondent had not substantiated his claim that the entire sale consideration had been paid.

Relying on the Supreme Court's ruling in Jaypee Kensington Boulevard Apartments Welfare Association v. NBCC (India) Ltd., the NCLT observed that the respondent could not stand outside the resolution plan approved by the Committee of Creditors (CoC).

The court also relied on Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, where the Supreme Court held that a successful resolution applicant cannot subsequently be confronted with undecided claims after approval of the resolution plan.

The NCLT held that the respondent had opportunities to file his claim during the CIRP and during the additional 60-day window, but chose not to do so. He therefore could not stand outside the resolution plan, which had attained finality.

The court ordered cancellation of the Sale Deed and Construction Agreement. It also directed the respondent to surrender the original documents within 30 days and ordered that claims arising from those documents would stand extinguished.