AA Rightly Rejected Sec 7 Plea From Home Buyers for Failing to Meet Required Allottees Threshold | NCLAT

Case Details: Pankaj Mehta v. Ansal Hi-tech Township Ltd. - [2024] 164 taxmann.com 478 (NCLAT- New Delhi)

Judiciary and Counsel Details

• M. Venugopal, judicial member & Arun Baroka, technical member
• Sahil Sethi, Samriddh Bindal & Vikash Kumar, Advs. for the Appellant. 
• Anshuj Dhingra, Ms Shubhangda Singh & Ms Muskan Banga, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant, a homebuyer/financial creditor, purchased units in the ‘SM’ township project developed by the respondent (i.e., the corporate debtor). Due to the corporate debtor’s default in handing over possession, the appellant filed an application under section 7 to initiate a corporate insolvency resolution process (CIRP).

The Respondent alleged that the said application lacked jurisdiction as it did not meet section 7 threshold criteria of being filed by at least 100 allottees or 10% of total allottees of the same project.

The NCLT vide the impugned order rejected the said application on the ground that the appellant’s units were part of separate projects within the township, failing to meet the required threshold.

It was noted that the respondent’s projects were of a different character and contained terms and conditions. Also, said ‘SM’ Township’ of more than 1500 Acres has `different types of developments with independent, `RERA’ Registrations and no phase-wise Registrations.

Further, it noted that the SM township was comprised of real estate projects of different characters, such as Viz. `Plots’, apartments and the said `Real Estate Projects’ were given different Building Sanctioned Plans with independent terms.

NCLAT Held

The NCLAT observed that the corporate debtor had submitted RERA Registration details, comprising Twenty-Five Projects with separate RERA Registrations’ and, in the CIRP Petition, in regard to `Nine Categories’ of the Project, the breakup of the number of appellants was shown but in none of the Projects /Project Categories, appellants fulfil requirement of `Threshold Limit’ of `10% or 100 persons’, whichever is less.

The NCLAT held that the appellant had filed an application under section 7 to initiate the CIRP against respondent from various projects. Still, they had not established their case as `Creditors of a class’ concerning any particular project registered with the Real Estate (Regulation & Development) Act, 2016, with a view to fulfilling the requirement of 10% or 100 Allottees, as envisaged, as per Section 7 of the IBC.

In view of facts, the impugned order passed by the NCLT rejecting the section 7 application was free from any legal flaws.

List of Cases Reviewed

• Pankaj Mehta v. Ansal Hi tech Township Ltd. [2024] 164 taxmann.com 477 (NCLT -New Delhi) (para 128) affirmed, See Annex