2025 (9) TMI 624 - SC - IBC

Appeal allowed; respondent directed to execute conveyance deed and deliver apartment possession within two months; verified allottees retain CIRP recognition.

Amit Nehra & Anr. Versus Pawan Kumar Garg & Ors.

The SC allowed the appeal, set aside the NCLAT and NCLT orders, and directed the respondent to execute the conveyance deed and hand over possession of the ... Failure to deliver possession of the allotted apartment despite substantial consideration being paid - Rejection of Appellants claim for possession of their residential apartment in the real estate project of M/s Puma Realtors Private Limited - fundamental misappreciation of facts and misapplication of the relevant clauses of the approved Resolution Plan - HELD THAT:- The admitted and undisputed position remains that the Appellants claim was resubmitted on 07.02.2020; that it was duly verified by the Resolution Professional; and that it was incorporated in the published list of creditors dated 30.04.2020. Once such verification and incorporation occurred, the claim acquired full legal recognition within the CIRP process. It is unable to countenance the approach of the NCLAT in brushing aside this admitted position, and in treating the Appellants as if they had not filed any claim at all. The publication of the list of financial creditors is an act in discharge of a statutory duty by the Resolution Professional. It cannot be reduced to a meaningless formality. What is critical to note is that this is not a case of entertaining a fresh claim beyond the Resolution Plan. It concerns an allottee whose claim was verified and admitted by the Resolution Professional and reflected in the list of financial creditors well before approval of the Plan by the Adjudicating Authority. To disregard such an admitted claim and confine the Appellants to the limited benefit under Clause 18.4(xi) is not to preserve the binding effect of the plan but to misapply it. Clause 18.4 itself draws a clear distinction between verified claims and belated or unverified claims; to obliterate that distinction would render the scheme otiose. Relegating bona fide allottees, who have paid substantial consideration years in advance, to the status of mere refund claimants runs contrary to the very object of the legislative framework. The facts of the present case highlight the plight of individual homebuyers, who invest their life savings in the hope of securing a roof over their heads. The Appellants had paid nearly the entire sale consideration as far back as 2011. To deny them possession today, despite their claim having been duly verified and admitted, would inflict unfair and unwarranted prejudice. Respondent(s) shall execute the Conveyance Deed and hand over possession of Apartment No. GBD-00-001, Block D, IREO Rise (Gardenia), Mohali to the Appellants within a period of two months from today - The judgment of the NCLAT as well as the order of the NCLT are hereby set aside. Appeal allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an allottee whose claim was verified and admitted by the Resolution Professional and reflected in the published list of financial creditors is to be treated as a 'belated' claimant under Clause 18.4(xi) of the approved Resolution Plan, thereby entitling the allottee only to a 50% refund, or whether such an allottee falls within the category entitled to unit delivery/conveyance under Clause 18.4(ii) read with Clause 18.4(vi)(a). 2. Whether the Adjudicating Authority and the Appellate Tribunal were justified in refusing possession and directing reduced refund where the claim had been resubmitted, verified and admitted during the CIRP prior to publication of the list of creditors. 3. The legal significance of admission/verification and inclusion of a homebuyer's claim in the Resolution Professional's published list of financial creditors in determining the allottee's entitlement under the terms of an approved resolution plan. ISSUE-WISE DETAILED ANALYSIS - Issue 1: Classification of Verified/Admitted Claims under Clause 18.4 Legal framework: The Resolution Plan's Clause 18.4 creates a taxonomy of homebuyer claims: (i) claims filed and admitted (Clause 18.4(ii)); (ii) payment/possession mechanisms for existing allottees (Clause 18.4(vi)(a)); and (iii) residuary treatment for unfiled/unverified/uninformed claims (Clause 18.4(xi)), with Clause 18.4(xix) addressing belated claims in a transitional manner. Precedent treatment: The Court relied on the reasoning in Puneet Kaur v. K.V. Developers (NCLAT) to underscore that claims reflected in corporate records ought not to be ignored and must be considered in the resolution process; that precedent was followed for the proposition that non-consideration of such claims leads to inequitable outcomes. Interpretation and reasoning: The Court interpreted Clause 18.4(xi) as residuary and confined to cases where a claim was not filed, not verified by the Resolution Professional, or not informed to the Resolution Applicant. The admitted facts showed verification and inclusion in the published list (Serial No. 636) of the claim. The Court reasoned that once a claim is verified and published it acquires full legal recognition within the CIRP process and cannot be retroactively downgraded to the belated/unverified category. Ratio vs. Obiter: Ratio - Verified and admitted inclusion of a homebuyer's claim in the Resolution Professional's list places the allottee within the operative categories of Clauses 18.4(ii) and 18.4(vi)(a) and not within Clause 18.4(xi). Obiter - Observations on the hardships of homebuyers and policy considerations underpinning equitable treatment are persuasive but ancillary to the decisive legal holding. Conclusions: The Court held that the allottee was not to be treated under Clause 18.4(xi) and was entitled to the benefits accorded to verified/admitted claimants - specifically conveyance and handover as per Clause 18.4(ii) read with Clause 18.4(vi)(a). ISSUE-WISE DETAILED ANALYSIS - Issue 2: Effect of Resubmission, Verification and Publication of Claim on Entitlement Legal framework: The IBC and the CIRP mechanism vest the Resolution Professional with duties to invite, verify and publish creditor claims. Publication of the list of financial creditors is an act discharging statutory duty and forms part of the information ecosystem governing the plan and its implementation. Precedent treatment: The Court relied on NCLAT precedent (Puneet Kaur) for the proposition that claims reflected in the corporate records must be transmitted to the Resolution Applicant and considered in the plan; failure to do so produces inequitable results. This principle was adopted rather than distinguished or overruled. Interpretation and reasoning: The Court placed decisive weight on the undisputed resubmission (07.02.2020), subsequent verification by the Resolution Professional, and incorporation in the list of creditors (30.04.2020). The Court held that these acts amounted to legal recognition of the claim within the CIRP prior to final adjudication, and therefore excluded the claim from the residuary category. The Court rejected reliance on the disputed earlier alleged physical filing (11.01.2019) as unnecessary to its conclusion, emphasising that the admitted 07.02.2020 resubmission and verification suffice. Ratio vs. Obiter: Ratio - Verification and publication by the Resolution Professional confer operative status on a claim for purposes of classification under an approved resolution plan; once admitted and published, the claim must be treated in accordance with the plan provisions applicable to admitted claims. Obiter - Detailed factual commentary about internal practices at project offices and mode of receipt of claims. Conclusions: Resubmission followed by verification and publication precluded treatment as belated/unverified; the allottee acquired entitlement to conveyance and possession as per the plan provisions for admitted claims. ISSUE-WISE DETAILED ANALYSIS - Issue 3: Validity of NCLT/NCLAT Approach and the Binding Effect of the Resolution Plan Legal framework: An approved resolution plan is binding on stakeholders but must be applied consistent with its own scheme and the verified record of claims; the plan itself distinguishes categories of claimants and the Resolution Professional's verification plays a determinative role. Precedent treatment: The Court followed authorities emphasising that the resolution plan cannot be mechanically applied to override admitted claims; equitable principles embedded in prior NCLAT decisions were used to ensure that admitted liabilities are not disregarded. Interpretation and reasoning: The Court criticised the NCLAT's mechanical application which treated the allottee as if no claim had been filed despite the admitted verification and publication. The Court reasoned that to dismiss an admitted claim into Clause 18.4(xi) post hoc would misapply the plan, render distinctions therein otiose, and defeat legislative intent to protect bona fide homebuyers. The Court held that publication by the Resolution Professional is not a mere formality but a substantive act recognizing the claim within CIRP. Ratio vs. Obiter: Ratio - Administrative or adjudicative acts by the Resolution Professional admitting a claim and publishing it are central to determining entitlements under an approved plan; appellate fora cannot reclassify such claims contrary to the plan's own categorisation without evidence that verification did not occur. Obiter - Policy remarks on plight of homebuyers and need to protect life-savings of individual allottees. Conclusions: The NCLT/NCLAT misapplied the plan; the plan's binding effect operates by reference to admitted claims, and the courts must enforce the plan consistent with the verified creditor list, not in disregard of admitted claims. REMEDIAL CONCLUSION AND DIRECTIONS (CONNECTED TO Issues 1-3) Conclusions: The appeal was allowed. The orders of the Adjudicating Authority and the Appellate Tribunal were set aside on the basis that the allottee's claim had been verified and admitted and therefore entitled the allottee to conveyance and possession under Clause 18.4(ii) read with Clause 18.4(vi)(a), not the 50% refund under Clause 18.4(xi). Directions: The Successful Resolution Applicant/Respondent(s) were directed to execute the conveyance deed and hand over possession of the apartment to the allottee within two months from the date of the judgment. CROSS-REFERENCES AND KEY LEGAL PRINCIPLES 1. Verified admission and publication of a claim by the Resolution Professional - see analysis under Issues 1 and 2 - is determinative of classification under the resolution plan. 2. Clause 18.4(xi) is residuary and applies only where no claim has been filed, not verified, or not informed to the Resolution Applicant; it does not apply to claims once verified and published (see Issue 1). 3. The binding nature of an approved resolution plan must be implemented in a manner consistent with the verified creditor record; mechanical reclassification of admitted claims undermines the plan's scheme (see Issue 3).