Case Name: Amit Nehra & Anr. v. Pawan Kumar Garg & Ors.
Citation: Civil Appeal No. 4296 of 2025
Court: Supreme Court of India
Bench: Justice Sanjay Kumar and Justice Satish Chandra Sharma
Date of Judgment: 9 September 2025
Acts/Sections Referred: Insolvency and Bankruptcy Code, 2016, Sections 5(8), 21, 25, 30, 31, 60 and 62; Real Estate (Regulation and Development) Act, 2016
Case Type: Insolvency and Bankruptcy / Homebuyer Rights / Resolution Plan / Financial Creditor
1. Introduction
The case of Amit Nehra & Anr. v. Pawan Kumar Garg & Ors. involved an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 by homebuyers who had invested in a real estate project that subsequently underwent Corporate Insolvency Resolution Process. Despite their claim as financial creditors being duly verified and admitted by the Resolution Professional and their names being included in the official list of financial creditors, the Appellants were denied possession of their apartment under the approved Resolution Plan and were instead relegated to receive only a partial refund. The Supreme Court was required to interpret the provisions of the Resolution Plan and to determine whether homebuyers whose claims had been verified and admitted could validly be classified as “belated claimants” entitled only to partial refund rather than delivery of possession.
2. Summary of Facts
The Appellants booked an apartment in 2010 in the residential project “IREO Rise (Gardenia)” in Mohali, Punjab, developed by M/s Puma Realtors Private Limited. A formal Buyer’s Agreement was executed in 2011 for a total consideration of Rupees sixty lakhs six thousand three hundred and sixty-eight, of which the Appellants had paid Rupees fifty-seven lakhs fifty-six thousand six hundred and eighty-four, constituting approximately ninety-five percent of the total price. The developer failed to deliver possession by the promised date of November 2013, and the Appellants filed a consumer complaint seeking a refund.
While the consumer complaint was pending, Corporate Insolvency Resolution Process was initiated against the Corporate Debtor on 17 October 2018. The Appellants asserted that they had physically submitted their claim at the project office on 11 January 2019, within the specified public announcement period. The Resolution Professional subsequently sent an email on 31 January 2020 inviting creditors to resubmit claims due to incomplete records of the Corporate Debtor. The Appellants resubmitted their claim by email on 7 February 2020. The Resolution Professional verified and admitted their claim for the full amount and included the Appellants at Serial Number 636 in the official list of financial creditors published on 30 April 2020.
However, a Resolution Plan approved by the Committee of Creditors on 23 August 2019 and by the NCLT on 1 June 2021 classified the Appellants as “belated claimants” under a residuary clause and awarded them only a fifty percent refund rather than delivery of their apartment, on the ground that their claim had been submitted after the Resolution Plan was finalised. The Appellants challenged this classification before the National Company Law Tribunal and the National Company Law Appellate Tribunal, both of which upheld the belated claimant classification.
3. Issues Before the Court
(i) Whether homebuyers whose claims have been duly verified and admitted by the Resolution Professional and whose names appear in the official list of financial creditors can be classified as “belated claimants” and denied the apartment delivery benefit provided to admitted claimants under the Resolution Plan.
(ii) Whether the Resolution Plan’s residuary clause could override the express provision for delivery of apartments to allottees whose claims had been verified and admitted.
4. Arguments by Both Parties
Arguments on behalf of the Appellants:
The Appellants contended that their claim had been duly verified and admitted by the Resolution Professional and that their names had been included in the official list of financial creditors. They argued that they fell squarely within the category of allottees entitled to delivery of their apartment under Clause 18.4(vi)(a) of the Resolution Plan, which expressly provided for apartment delivery to verified and admitted claimants. The residuary clause for belated claimants could not override the express provision and could not apply to persons whose claims had been formally admitted.
Arguments on behalf of the Respondents:
The Respondents contended that the Appellants had not filed their claim within the original period specified in the public announcement and that their resubmission in February 2020 was after the Resolution Plan had already been approved by the Committee of Creditors in August 2019. They argued that treating the Appellants as admitted claimants entitled to apartment delivery would be unfair to the Resolution Applicant who had committed to the plan based on the verified list of creditors at the time of plan approval.
5. Reasonings and Findings
The Supreme Court allowed the appeal and held that the Appellants were entitled to delivery of their apartment rather than the partial refund provided under the residuary clause. The Court examined the provisions of the Resolution Plan carefully and found that Clause 18.4(vi)(a) expressly provided that allottees whose claims had been verified and admitted were entitled to delivery of their apartments. The Appellants’ claim had been verified, admitted, and included in the official list of financial creditors.
The Court held that the fact that the Appellants resubmitted their claim in February 2020, after the Committee of Creditors had approved the Resolution Plan in August 2019, did not transform them into “belated claimants” within the meaning of the residuary clause. The resubmission had been made in direct response to the Resolution Professional’s own invitation to creditors to resubmit claims due to incomplete records of the Corporate Debtor, and the Resolution Professional had accepted and admitted the claim. Having admitted the claim, the Resolution Professional could not subsequently treat the Appellants as residuary or belated claimants.
The Court also noted the broader principle that homebuyers who have paid substantial consideration for apartments in real estate projects are financial creditors under the Insolvency and Bankruptcy Code, 2016 and are entitled to the protections afforded to that category. Resolution Plans that arbitrarily dilute the entitlements of admitted financial creditors without adequate justification are susceptible to challenge.
6. Judgment and Conclusion
The Supreme Court allowed the appeal and directed delivery of the apartment to the Appellants in accordance with Clause 18.4(vi)(a) of the Resolution Plan. The judgment affirms the principle that homebuyers whose claims are verified and admitted by the Resolution Professional are financial creditors entitled to the benefits provided under the Resolution Plan for that category, and that residuary clauses cannot be applied to override the express provisions applicable to admitted claimants.
7. Frequently Asked Questions
Q1. What is the Insolvency and Bankruptcy Code, 2016?
The Insolvency and Bankruptcy Code, 2016 is a comprehensive legislation providing for a time-bound process for resolving insolvency of corporate persons, partnership firms, and individuals in India. It establishes the Corporate Insolvency Resolution Process under which a resolution plan is formulated to revive the insolvent entity or liquidate its assets for distribution among creditors.
Q2. Are homebuyers financial creditors under the Insolvency and Bankruptcy Code, 2016?
Yes. Following amendments to the Insolvency and Bankruptcy Code, 2016, homebuyers who have paid for apartments in real estate projects are classified as financial creditors. This means they are entitled to participate in the Committee of Creditors, submit claims in insolvency proceedings, and receive the protections afforded to financial creditors under the Code.
Q3. What is a Resolution Plan?
A Resolution Plan is a plan submitted by a Resolution Applicant for the revival of the Corporate Debtor and for payment of dues to creditors. Once approved by the Committee of Creditors and confirmed by the National Company Law Tribunal, a Resolution Plan becomes binding on the Corporate Debtor and all its creditors.
Q4. What is a belated claimant in insolvency proceedings?
A belated claimant is a creditor who submits a claim after the prescribed period for filing claims has expired. In many Resolution Plans, belated claimants receive reduced or different treatment compared to timely claimants. However, as this judgment makes clear, a creditor cannot be treated as a belated claimant if the Resolution Professional has accepted, verified, and admitted the claim.
Q5. What protection does the Supreme Court’s judgment provide to homebuyers in insolvency proceedings?
The judgment provides important protection to homebuyers by ensuring that if their claims are verified and admitted by the Resolution Professional and included in the official list of financial creditors, they are entitled to the full benefits provided to admitted claimants under the Resolution Plan, including delivery of possession of their apartments rather than a mere partial refund.
