NCLT Chandigarh Denies Financial Creditor Status To Samar Estates Flat Buyers After Allotment Cancellation

The Chandigarh Bench of the National Company Law Tribunal (NCLT) has dismissed a plea by two flat buyers seeking recognition as financial creditors of Samar Estates Pvt. Ltd. and inclusion in the company's Committee of Creditors (CoC).

The Tribunal held that their allotment had stood cancelled more than a decade before the insolvency process began.

A bench of Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal passed the order.

The Tribunal observed, “Therefore, once the allotment itself stood cancelled and no subsisting right in the apartment survived, the amount allegedly paid by the Applicants cannot be treated as money raised from an allottee under a real estate project so as to constitute a financial debt under Section 5(8)(f) of the Code. The contractual relationship between the parties came to an end upon cancellation and, therefore, the Applicants cannot seek inclusion in the CoC as Financial Creditor in a class.”

Radhey Sham Midha and Sandeep Kumar Bhatla entered into an Apartment Buyers Agreement with Samar Estates on February 9, 2013. The flat carried a tentative price of ₹67.70 lakh. They paid ₹25.48 lakh.

According to the resolution professional, the buyers failed to pay a construction-linked instalment of ₹39.20 lakh that fell due on September 2, 2013.

A demand notice issued in June 2013 warned that the allotment would be cancelled if the outstanding amount was not paid within three months. The dues remained unpaid, and the allotment stood cancelled.

Samar Estates entered insolvency proceedings in January 2024. The two buyers filed their claim in November 2024, seeking recognition as financial creditors. Their claim form reflected ₹25.48 lakh, while the amount sought before the Tribunal was about ₹4.05 crore. The resolution professional rejected the claim later that month.

The buyers challenged the rejection, arguing that they had not received individual communication about the insolvency process and that this delayed the filing of their claim.

The resolution professional opposed the plea. He argued that the claim amount was unsupported by documents and was filed after the Committee of Creditors had approved the resolution plan.

RP also maintained that no direct payment by the buyers could be traced in the company's books of account. He further submitted that the only traceable payments in the company's records were those received through Real Pro Assets Pvt. Ltd. Midha was a director of that company.

Addressing the allegation regarding notice, the Tribunal found that the public announcement required under the insolvency process had been duly made. It also found that notices had been dispatched to the buyers through courier in February 2024.

The tribunal held, “Therefore, this Tribunal is of the considered view that the contention of the Applicants regarding non-compliance of Regulation 6A of the CIRP Regulations cannot be accepted.”

The tribunal further held that the buyers had ceased to be allottees long before the commencement of the insolvency proceedings. It noted that the allotment had already been terminated under the contractual terms after they failed to make the required payments.

The bench also agreed with the resolution professional's stand that the claim was filed after the Committee of Creditors had approved the resolution plan. Referring to the timelines prescribed under the CIRP Regulations, it held that the resolution professional was not required to verify or admit such a belated claim.

Finding no fault with the rejection of the claim, the Tribunal dismissed the application.