Commercial unit allottees with uncancelled allotments qualify as financial creditors in a class under the real estate framework.

Valid commercial unit allotment letters that remain uncancelled keep the applicants within the statutory concept of an allottee under the real estate framework, so they may be classified as financial creditors in a class for insolvency purposes. A proposed substitute arrangement that did not result in fresh allotment letters does not displace the earlier allotments. An applicant against whom no unit was ever allotted cannot be placed in that class and is to be treated only as a financial creditor.

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Issues: Whether the applicants, being allottees of commercial units in the real estate project, were to be treated as financial creditors in a class or only as independent financial creditors, and whether the claim of the applicant against whom no unit had been allotted could be admitted only as a financial creditor.

Analysis: The applicants had been issued allotment letters for commercial units in 2015 and 2016. The proposed MOU for substitution of service apartments did not culminate in any allotment letters for service apartments, and no cancellation letters were issued in respect of the earlier commercial unit allotments. The respondent's affidavit also accepted that, for most units, the applicants were first allottees or had clear allotment, and the earlier allotments remained uncancelled. On these facts, the applicants with valid commercial allotments fell within the statutory concept of an allottee under Section 2(d) of the Real Estate (Regulation and Development) Act, 2016, and were therefore entitled to classification as financial creditors in a class. The applicant against whom no unit had been allotted could not be placed in that class and was to be treated only as a financial creditor.

Conclusion: The applicants holding valid commercial unit allotments were held to be financial creditors in a class, while the applicant without any allotment was held to be only a financial creditor.

Final Conclusion: The application succeeded in part, with the respondents directed to classify the eligible applicants in the financial creditor in a class category and to treat the no-allotment claimant separately as an ordinary financial creditor.

Ratio Decidendi: Where earlier allotment letters of commercial units remain uncancelled and no effective substitute allotment is issued, the allottees continue to be treated as allottees for insolvency classification purposes and may be classified as financial creditors in a class under the real estate framework.

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