Allottee status under insolvency law survives a RERA refund order, keeping the Section 7 threshold applicable.

An allottee in a real estate project remains a financial creditor under the Insolvency and Bankruptcy Code because the amount raised from such allottee is deemed to have the commercial effect of a borrowing. A RERA refund order does not extinguish the underlying allottee status or alter the character of the claim into something distinct; the distinction between allottees with a refund decree and other allottees is artificial. The Code's non obstante clause gives it overriding effect, so such applicants continue to fall within the class governed by the second proviso to Section 7(1), and non-compliance with that threshold justified rejection of the Section 7 application.

---

---

Issues: Whether allottees who obtained a refund order from RERA continued to remain allottees and financial creditors for the purpose of Section 7 of the Insolvency and Bankruptcy Code, 2016, and were therefore bound by the second proviso to Section 7(1).

Analysis: The statutory scheme treats an allottee in a real estate project as a financial creditor because the amount raised from such allottee is deemed to have the commercial effect of a borrowing. A person to whom a debt is owed may also be a decree-holder, but the mere crystallisation of the underlying claim in a RERA refund order does not change the character of the claim or the status of the allottee. The refund order did not extinguish the applicants' underlying allottee status, and the distinction sought to be drawn between allottees with a RERA decree and other allottees was held to be artificial. The non obstante clause in the Insolvency and Bankruptcy Code, 2016 gave its provisions overriding effect, and the applicants remained within the class of allottees governed by the threshold in the second proviso to Section 7(1).

Conclusion: The applicants continued to be allottees and financial creditors, and their Section 7 application was subject to the second proviso to Section 7(1); rejection for non-compliance was upheld.

---