Homebuyer status and allottee threshold under IBC Section 7 fail where the project wing is unregistered.

Homebuyers in an unregistered project wing sought to invoke Section 7 of the Insolvency and Bankruptcy Code, 2016 on the basis of allotment letters and payments for flats in Wing E. The Tribunal's analysis turned on whether the applicants could establish the status of allottees under the Real Estate (Regulation and Development) Act, 2016 and thereby satisfy the proviso to Section 7 requiring the prescribed threshold of allottees. On the facts stated, the applicants failed to establish the required status and threshold for initiating insolvency proceedings, and the Section 7 petition was held not maintainable and rejected.

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Issues: (i) Whether the petitioners, claiming to be homebuyers in an unregistered wing of the project, satisfied the statutory requirement to maintain an application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The petitioners sought to invoke the insolvency process as financial creditors on the basis of allotment letters and payments made for flats in Wing E of the project. The objection was that Wing E was not registered as a real estate project and that, unless the applicants qualified as allottees under the Real Estate (Regulation and Development) Act, 2016, the proviso to Section 7 of the Insolvency and Bankruptcy Code, 2016 requiring the prescribed threshold of allottees could not be satisfied. The Tribunal accepted that the applicability of the real estate framework depended on registration of the project and concluded that, on the facts, the petitioners had failed to establish the required status and threshold for initiating insolvency proceedings.

Conclusion: The petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 was not maintainable and was rejected.

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