NCLT admitted an insolvency petition based on a ₹3.43 crore default, upholding homebuyers' status as financial creditors after the corporate debtor failed to rebut a 540-unit project threshold.
NCLT Admits ₹3.43 Cr Insolvency Plea by Homebuyers
The National Company Law Tribunal (NCLT) admitted an insolvency petition filed by homebuyers against a real estate developer, citing a default of ₹3.43 crore. The decision turned on the corporate debtor’s failure to disprove that the residential project exceeded 540 units—a statutory threshold determining eligibility under Section 3(22) of the IBC.
Homebuyers were recognised as financial creditors under Section 5(8)(f) of the IBC, which includes amounts raised from allottees for property development. The NCLT held that once the operational debt was proven, and the project size established via registered documents, the burden shifted to the corporate debtor to refute the claim. As no rebuttal was offered, the petition was admitted under Section 7 of the IBC.
This ruling reinforces the rights of homebuyers in insolvency proceedings, especially in large-scale projects. Legal practitioners should ensure that Section 7 petitions by homebuyers include conclusive evidence of project size and default, as non-rebuttal may lead to automatic admission under the IBC framework.
Citations
- Insolvency and Bankruptcy Code, Section 5(8)(f), Section 7, Section 3(22)
