SC To Consider Whether Homebuyer Whose Payment Is Reflected In Accounts Of Builder But Has Not Filed Claim In Insolvency Proceedings Retains Entitlement

In a significant development, the Supreme Court has decided to delve into the issue of whether a homebuyer's failure to file a claim under the Insolvency Resolution Plan (IRP) could deprive them of obtaining possession of a flat, despite having made payments that are duly reflected in the accounts of the corporate debtor.

While issuing notice in response to a plea filed by a homebuyer, the Bench of Justice Sanjiv Khanna and Justice Dipankar Dutta clarified that the Court's decision does not interfere with the execution or implementation of the resolution plan in the specific case at hand.

"We clarify that the issue of notice in the present appeal will not come in the way of execution/implementation of the resolution plan. Allotment of the unit to the appellant, if made, will be subject to the outcome of the present appeal and the right and claim of the appellant," the Bench said.

Senior Advocate Archana Pathak Dave appeared for the Appellant while Senior Advocate Neeraj Kishan Kaul appeared for the Respondents.

The Appellant was allotted a flat in a project undertaken by the corporate debtor, Jaypee Infratech Limited (JIL), back in 2009. Subsequently, he made substantial payments toward the purchase of the flat, however, despite the payments, he has not received possession of the flat till date. Further, JIL entered the Corporate Insolvency Resolution Process (CIRP).

During the insolvency process, the Insolvency and Bankruptcy Board of India (IBBI) directed the insolvency professional to assess the claims of homebuyers based on the records of the corporate debtor. JIL's website stated that the flats of homebuyers who did not file claims during the insolvency process would be treated on par with other homebuyers, rendering the submission of a claim form by the appellant non-mandatory.

Pertinently, the Appellant's flat was listed as a liability of the corporate debtor in the information memorandum, however, in the Resolution Plan approved by the National Company Law Tribunal (NCLT) and proposed by the Successful Resolution Applicant (SRA), a contingent deadline of March 7, 2023, was set for the submission of claims. Citing his failure to submit the claim form, JIL subsequently denied his possession of the flat. He had then approached the National Company Law Appellate Tribunal (NCLAT), seeking relief, however his plea was dismissed. Thereafter, he challenged the same by filing an Appeal before the Apex Court.

During the hearing on April 29, the Appellant, representing the interests of homebuyers, argued that filing a claim was unnecessary since the appellant's name was duly recorded in the corporate debtor's accounts and there was no dispute regarding the genuineness of the payments made.

"The appellant is not challenging the resolution plan and merits thereof. The appellant restricts his claim only to the extent that he is a home buyer whose payments were/are reflected in the books of accounts of the corporate debtor and that there is no dispute that the payments are genuine. Learned counsel submits that non-filing of the claim etc. by the appellant should not result in rejecting his claim and entitlement as a home buyer," the Court noted in its Order.

While scheduling the matter for further consideration in the week commencing September 2, the Court ordered, "Counter affidavit/reply will be filed within six weeks from today. Rejoinder affidavit, if any, will be filed within six weeks after the service of counter affidavit/reply."

Cause Title: Ayush Agarwal v. Jaypee Infratech Ltd & Ors. [Civil Appeal No. 5185/2024]

Appearance:-

Appellant: Senior Advocate Archana Pathak Dave, Advocates Tushar Jain (AoR), Mukesh Kumar, Vaibhav Chowdhary, Sumant Batra, Sanjay Bhati, Rabin Mazumdar, Sarthak Bhandari, Nidhi Yadav

Respondent: Senior Advocate Neeraj Kishan Kaul, Advocates EC Agrawala (AoR), Mahesh Agarwal, Rishi Agrawala, Geetika Sharma, Sagar Bansal

Click here to read/download the Order