Section 7 insolvency threshold and decree enforcement limits bar a lone homebuyer from initiating CIRP without the bank.

A single homebuyer could not maintain a section 7 application after the collective filing threshold for homebuyers was not met, and the petition failed on that basis. A decree holder could not use section 7 to execute an adjudicated claim because a decree does not itself create a financial debt arising from the time value of money, so the applicant was not a financial creditor for CIRP purposes. A tripartite bank arrangement also prevented the petitioner from proceeding alone, as the bank retained the relevant repayment rights and was a necessary party. The section 7 application was held not maintainable, leaving other legal remedies open.

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Issues: (i) Whether a single homebuyer could maintain an application under section 7 of the Insolvency and Bankruptcy Code, 2016 without satisfying the statutory threshold applicable to homebuyers. (ii) Whether a decree holder could invoke section 7 of the Insolvency and Bankruptcy Code, 2016 to execute an adjudicated claim. (iii) Whether the petitioner, in view of the tripartite arrangement with the bank, could be treated as a financial creditor and proceed without impleading the bank.

Issue (i): Whether a single homebuyer could maintain an application under section 7 of the Insolvency and Bankruptcy Code, 2016 without satisfying the statutory threshold applicable to homebuyers.

Analysis: The petition was filed by only one homebuyer after the amendment governing collective filing by homebuyers. The statutory threshold required filing by the prescribed minimum number or percentage of allottees. The petition did not satisfy either limb of that threshold.

Conclusion: The issue is answered against the petitioner.

Issue (ii): Whether a decree holder could invoke section 7 of the Insolvency and Bankruptcy Code, 2016 to execute an adjudicated claim.

Analysis: The claim sought to be enforced had already been reduced to a decree. An adjudicated amount does not represent a financial debt arising from consideration for the time value of money, and a decree holder, though a creditor in a broad sense, does not become a financial creditor for the purpose of initiating corporate insolvency resolution proceedings merely to execute the decree.

Conclusion: The issue is answered against the petitioner.

Issue (iii): Whether the petitioner, in view of the tripartite arrangement with the bank, could be treated as a financial creditor and proceed without impleading the bank.

Analysis: The loan was disbursed by the bank and the contractual arrangement indicated that repayment rights stood with the bank. In such circumstances, the petitioner had subrogated the relevant rights and the bank was a necessary party. The absence of the bank as a party and the contractual allocation of repayment rights negatived the petitioner's status as the relevant financial creditor.

Conclusion: The issue is answered against the petitioner.

Final Conclusion: The application under section 7 was held not maintainable and the insolvency proceeding was brought to an end, while leaving the petitioners free to pursue other remedies available in law.

Ratio Decidendi: A homebuyer who does not satisfy the statutory collective threshold, and who seeks to invoke section 7 merely to execute a decree or enforce an adjudicated amount, cannot be treated as a financial creditor entitled to initiate CIRP.

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