Does not filing a claim during the insolvency proceedings entitle the home buyer to a flat? Supreme Court to investigate

The Supreme Court recently decided to examine whether failure to file a claim under the Insolvency Resolution Plan (IRP) can deprive a homebuyer of the right to take possession of an apartment, even if the payments he has made are reflected in the accounts of the corporate debtor. (Ayush Agarwal v. Jaypee Infratech Limited and others).

While issuing notice in a plea preferred by a home buyer, a Bench of Justices Sanjiv Khanna And Dipankar Dutta clarifies that in that particular case there is no interference in the execution/implementation of the resolution plan.

In 2009, the appellant was allotted a flat in a project to be developed by corporate debtor Jaypee Infratech Limited (JIL). Appellant has paid virtually the entire compensation amount to JIL. The balance of possession of the flat was payable at the time of possession. However, possession of the said flat has not taken place till date. Meanwhile, the JIL proceeded with the Corporate Insolvency Resolution Process (CIRP).

During the process, the Insolvency and Bankruptcy Board of India (IBBI) directed the insolvency professional to assess the claims of the home buyers based on the corporate debtor’s records. JIL’s website stated that the apartments of homebuyers who did not file the claim during the insolvency process should be treated the same as other homebuyers and therefore the claimant was not required to file the claim form.

The appellant’s home is included in the Information Memorandum as an obligation of the commercial debtor.

However, the Successful Resolution Applicant’s (SRA) Resolution Plan as approved by the National Company Law Tribunal (NCLT) included a contingent date of March 7, 2023 for filing claims. JIL denied the appellant possession of the flat and stated that since the claim form had not been submitted on March 7, the appellant has no right to the flat.

Aggrieved, the appellant approached the National Company Law Appellate Tribunal (NCLAT), which dismissed the plea. He subsequently filed the present appeal before the Supreme Court.

Before the top court, the appellant home buyer has argued that he need not file any claims as his name is reflected in the corporate debtor’s records and there is no doubt that his payments are genuine.

In view of all this, the Court has set the case for hearing on September 2, 2024.

Senior advocate Archana Pathak Dave, advocate-on-record Tushar Jain and advocates Mukesh Kumar, Vaibhav Chowdhary, Sumant Batra, Sanjay Bhati, Rabin Mazumdar, Sarthak Bhandari and Nidhi Yadav appeared for the appellant.

Senior advocate Neeraj Kishan Kaul, advocate-on-record EC Agrawala and advocates Mahesh Agarwal, Rishi Agrawala, Geetika Sharma and Sagar Bansal appeared for JIL.