Contractual force majeure extension defeats Section 7 insolvency trigger where possession is offered after completion approvals.

Contractual extension of possession timelines, including force majeure delay, defeated the Section 7 insolvency trigger because the promoter showed that construction was delayed by a court stay, the completion date was extended on the RERA record, and possession was offered after the occupation certificate was obtained. On those facts, the Tribunal found no present default in amounts due and payable and held that the petitioners could not invoke the corporate insolvency resolution process. A refund claim could not, on the proved record, be used to commence insolvency proceedings.

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Issues: Whether the petitioners established a default so as to trigger the corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016, in view of the contractual extension of time, the alleged force majeure delay, and the subsequent offer of possession.

Analysis: The agreement for sale provided a handover date in July 2018 with a six-month grace period and further extension in the event of force majeure. The record showed that construction was delayed because of a court stay affecting the project, which in turn delayed the fire-fighting ramp and common podium essential for completion and occupation certification. The project's completion date was also extended on the RERA record, and possession was offered after the occupation certificate was received. In these circumstances, the Tribunal held that the delay fell within the contractual extension and that the petitioners had not shown a present default in payment of amounts due and payable so as to justify invocation of Section 7.

Conclusion: The petition under Section 7 was not maintainable on the facts proved, and no default triggering insolvency was established; the claim for refund could not be used to commence the insolvency process.

Ratio Decidendi: Where contractual possession timelines are extended by force majeure and the promoter demonstrates that possession was offered within the extended period after completion-related approvals, a Section 7 insolvency petition will fail absent proof of a subsisting default in amounts due and payable.

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