Homebuyers Triggers CIRP

The NCLT Chandigarh Bench admitted a Section 7 application filed by a group of homebuyers against a real estate developer after finding that the statutory threshold requirement for allottees was satisfied, the claim was within limitation, and the amounts paid by the allottees constituted financial debt under the Insolvency and Bankruptcy Code, 2016. 

The Tribunal held that the developer’s inability to complete the project due to attachment and auction of project land did not absolve it from its obligation to either deliver possession or refund the amounts received from the allottees. Consequently, Corporate Insolvency Resolution Process (CIRP) was initiated against the developer.