Purported flat allotment cannot confer homebuyer status in CIRP where the project is already charged and lender consent is absent.
A purported settlement allotment of flats could not convert a prior loan claimant into a homebuyer or allottee in CIRP where the original advance was a loan, the project was already encumbered by a secured lender's charge, and no required no-objection certificate had been obtained. On those facts, the claimed allotment did not establish a clear right to file Form-CA as a genuine allottee under real estate law. The claim was therefore to be treated as an ordinary creditor claim, and rejection of Form-CA treatment was found to be free from infirmity.
Issues: Whether the appellant was entitled to be treated as an allottee or homebuyer and to have its claim accepted in Form-CA in the corporate insolvency resolution process.
Analysis: The appellant's original advance to the corporate debtor was a loan. The later unregistered settlement arrangement purporting to allot seven flats was examined against the existing charge in favour of Canara Bank over the entire project, including movable and immovable assets, current and future receivables, and current assets. The record also showed that no no-objection certificate had been obtained from the secured lender, although such consent was required for allotment of flats. In these circumstances, the claimed allotment did not establish a clear right to be treated as an allottee or homebuyer. The arrangement also raised serious doubt as to whether the appellant had acquired the status of a genuine allottee within the meaning of the real estate law.
Conclusion: The appellant was not entitled to be treated as a homebuyer or allottee for filing its claim in Form-CA.
Final Conclusion: The claim was correctly directed to be treated as an ordinary creditor claim, and the order rejecting Form-CA treatment suffered from no infirmity.
Ratio Decidendi: A claimant cannot be treated as a homebuyer or allottee in CIRP on the basis of a purported settlement allotment made in respect of property already subject to a secured lender's charge, particularly where the required no-objection is absent and the claimant is not shown to be a genuine allottee.
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AI Drafter ✕
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