NCLT admitted a Section 7 petition by homebuyers, finding corporate debtor failed to disprove 540-unit threshold for financial creditor status.
NCLT Upholds Homebuyers’ Insolvency Petition Based on Unit Threshold
The National Company Law Tribunal (NCLT) admitted a corporate insolvency application under Section 7 of the IBC filed by homebuyers, holding that the aggregate default of ₹3.43 crore was sufficient given the developer's failure to rebut the 540-unit benchmark. Under IBC jurisprudence, homebuyers qualify as financial creditors if the real estate project exceeds a specified size.
The corporate debtor did not contest the number of units or provide evidence to disprove the baseline, allowing the NCLT to proceed with the admission. The bench reaffirmed the principle from Ancient Heritage v. Axis Bank that homebuyers’ contributions constitute financial debt when linked to real estate development.
This ruling reinforces the standing of homebuyers in insolvency processes, particularly in mid-sized projects. Practitioners must ensure documentary proof of project scale and timely rebuttal to prevent default admissions.
Citations
- Ancient Heritage v. Axis Bank
