Case Note & Summary
The appeal was filed by Mr. Raj Kumar Jhawar and Mrs. Shobha Jhawar, homebuyers of Monarch Brookfields LLP, against an order of the National Company Law Tribunal (NCLT) that dismissed their application to exclude their flat from the corporate debtor's resolution process. The Appellants had entered into a registered Agreement to Sell for Flat No. 1002, fully paid for, but failed to submit their claim until June 2024, long after the resolution plan was approved. They argued that health issues and the COVID-19 pandemic delayed their awareness of the Corporate Insolvency Resolution Process (CIRP). The Respondents, including the Resolution Professional, contended that the Appellants had no ownership rights as no conveyance deed was executed and their claim was belated. The NCLT had approved the resolution plan on 27 August 2024, and the Appellants' claim was rejected on the grounds of delay and lack of evidence of payment. The Appellants argued that they fell within Category A of the resolution plan, while the Resolution Professional favored another claimant, Mr. Amit Kriplani, whose claim was based on unregistered allotment letters. The Tribunal found that the Appellants' claim was not part of the approved resolution plan and noted discrepancies in their payment claims, leading to the dismissal of the appeal. The Tribunal emphasized the importance of timely claims in the CIRP process and the finality of approved resolution plans.
Headnote
A) Insolvency Law - Homebuyer Rights - Exclusion from Resolution Process - Insolvency and Bankruptcy Code, 2016, Section 31 - The Appellants, as homebuyers, sought exclusion of their flat from the resolution process, claiming ownership rights based on a registered Agreement to Sell. The Tribunal held that their claim was belated and did not form part of the approved resolution plan, thus dismissing the appeal (Paras 1-2). B) Insolvency Law - Timeliness of Claims - Insolvency and Bankruptcy Code, 2016, Section 7 - The Appellants filed their claim significantly after the resolution plan was approved, which the Tribunal found to be a substantial delay that could not be condoned, leading to the dismissal of their application (Paras 24-26). C) Insolvency Law - Discrepancies in Claims - Insolvency and Bankruptcy Code, 2016, Section 31 - The Tribunal noted inconsistencies in the Appellants' claims regarding payment amounts and timelines, which undermined their credibility and justified the rejection of their claim (Paras 40-46).
Issue of Consideration
Whether the Appellants' claim for exclusion of their flat from the resolution process was valid despite being submitted belatedly.
Final Decision
The Tribunal dismissed the appeal, affirming the NCLT's order that the Appellants' claim was belated and did not form part of the approved resolution plan, emphasizing the importance of timely claims in the CIRP process.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Corporate Insolvency Resolution Process
- homebuyer rights
- belated claims
- resolution plan approval
