NCLAT Upholds Order Recall After Corporate Debtor Misrepresented Facts About Unit Holders in Section 7 IBC Homebuyers Case.

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....NCLAT affirmed the recall of order dated 04.06.2024 in a Section 7 IBC petition involving homebuyers. The Corporate Debtor had misrepresented facts regarding the number of unit holders and eligibility requirements under the second proviso to Section 7(1) of IBC. While the Corporate Debtor claimed 282 unit holders with only 12 allottees as petitioners, evidence showed the homebuyers had filed compliance affidavits with supporting MAHARERA certificates. The Tribunal held that inherent powers u/r 11 of NCLT Rules could be invoked to prevent abuse of process where orders were obtained through misrepresentation. The recall was justified as the original order was not decided on merits but influenced by distorted facts and procedural irregularities.....