NCLAT Refuses Homebuyer Recognition to Allottee Who Cancelled Flat; Orders ₹17 Lakh Refund from Resolution Plan Reserve

The National Company Law Appellate Tribunal (NCLAT) refused to recognise the Appellant as a homebuyer on the ground that he had voluntarily cancelled the flat allotment, and consequently directed that a refund of ₹17 lakhs be made to him from the resolution plan reserve.

The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating a company appeal and connected interlocutory application, held that an allottee who had voluntarily cancelled the flat and subsequently settled the bank loan taken to pay the developer is not entitled to be treated as a homebuyer or financial creditor under the resolution plan; however, since the buyer discharged the original liability towards the corporate debtor, he is entitled to reimbursement from the amount reserved in the resolution plan.

The National Company Law Appellate Tribunal disposed of an appeal filed by the appellant–homebuyer challenging the rejection of his application seeking reclassification of his claim as a homebuyer under a resolution plan. The appellant had been allotted a residential unit in 2015 for ₹29 lakhs, which was paid directly by UCO Bank through a home loan. However, in 2018, the appellant voluntarily cancelled the allotment and later settled the outstanding dues with the bank for ₹17 lakhs, resulting in the withdrawal of the recovery proceedings before the DRT.

Subsequently, after the initiation of CIRP against the corporate debtor and approval of the resolution plan in 2021, the appellant filed his claim with the resolution professional, initially in Form CA and later in Form C, attaching the UP RERA order that had previously awarded a decree in his favour. However, the resolution professional categorised him as an unsecured financial creditor and not a homebuyer, citing that corporate debtor records did not reflect the appellant as an allottee, and the unit was shown as vacant inventory. The appellant sought parity with other homebuyers relying on the Supreme Court’s ruling in Vishal Chelani and Others v. Debashis Nanda, REEDLAW 2023 SC 10580, but the Adjudicating Authority rejected his plea.

NCLAT observed that since the appellant himself had cancelled the allotment and made no direct payment to the corporate debtor, his claim could not be treated as that of a homebuyer. However, the Tribunal acknowledged that the appellant had settled the bank’s dues and that the corporate debtor’s books still reflected the ₹29 lakh liability. It held that the appellant, having paid ₹17 lakhs to settle the loan, was entitled to be reimbursed from the funds reserved under the resolution plan. The Tribunal accordingly directed the respondent to pay ₹17 lakhs to the appellant within 60 days, and disposed of the appeal.

Mr. Rakesh K. Bajaj and Ms. Arohi Bhalla, Advocates, represented the Appellant.

Mr. Sumant Batra and Mr. Sarthak Bhandari, Advocates, appeared for the Resolution Professional (RP).

Ms. Anuja Pethia and Mr. Rishabh Govila, Advocates, appeared for the Successful Resolution Applicant S(RA).

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