Allotment In Proposed Realty Project Without Fund Disbursement By Claimants Is Not Financial Debt: NCLT Mumbai
Kirit Singhania
2 Feb 2026 6:34 PM IST
The National Company Law Tribunal (NCLT) at Mumbai has dismissed six applications seeking recognition as financial creditors in the insolvency of E-Commerce Magnum Solution Ltd. It held that a purported allotment in a proposed real estate project, without proof of disbursement, does not create a financial debt under the Insolvency and Bankruptcy Code.
“Merely producing a copy of the purported allotment letter will not by itself create a financial debt under Section 5(8) of the Code without producing the corresponding receipts of payment or disbursement”, tribunal observed.
A coram of Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt rejected applications filed by six individuals, including Yash Manish Pethani and members of the Adani family, against the resolution professional of E-Commerce Magnum Solution Ltd.
The applicants had sought directions for admission of their claims as financial creditors in a class, asserting that they were allottees in a proposed real estate project titled “Marquis”.
The applications arose from the CIRP initiated against the debtor on July 1, 2024, on a petition filed by J.C. Flowers Asset Reconstruction Private Ltd. After the public announcement was issued on July 4, 2024, the applicants submitted their claims in December 2024. They relied on allotment letters of April 7, 2019 and claimed that Rs 48 lakh per applicant had been paid towards booking of flats.
The resolution professional opposed the claims. He pointed out that it was an admitted position that no payment had been made by the applicants themselves and that the alleged amounts were paid by a third party without any assignment deed, agency agreement or authorisation.
Rejecting the applications, the tribunal held that disbursement against consideration for time value of money is a sine qua non for a financial debt. It noted that Regulation 8A of the CIRP Regulations only prescribes the mode of proof and cannot override the substantive requirements of the Code.
The tribunal further observed that the allotment letters indicated that the applicants were investors in a proposed project which was neither registered under RERA nor had any specific flats allotted.
Finding no illegality in the conduct of the resolution professional, the tribunal dismissed the applications as devoid of merit.
For Applicant: Advocate Yahya Batatawala
For Respondent: Advocate Khushboo Shah Rajani I/b.AKR Legal