Home Buyers' Rights in Builder Insolvency | Amit Nehra Case Supreme Court Analysis

❓ Question:

CAN A HOME BUYER GET POSSESSION OF THEIR FLAT EVEN IF THEY SUBMITTED THEIR CLAIM LATE DURING THE BUILDER'S INSOLVENCY?

✅ Answer:

YES. The Supreme Court has ruled that if a home buyer's claim is verified and admitted by the Resolution Professional and included in the list of creditors, they are entitled to possession of their flat, even if the claim was submitted after initial deadlines.

🧩 Understanding the Legal Principles

⚖️ What the Supreme Court Has Held:

1. Verified Claims Cannot Be Treated as Belated

Once a claim is verified and admitted by the Resolution Professional
And included in the official list of creditors
It becomes a legally recognized claim in the insolvency process
Cannot be relegated to "belated claimant" category

2. Publication of Creditor List is Statutory Duty

The list of financial creditors published by Resolution Professional is a statutory act
It cannot be treated as a meaningless formality
Once your name appears in this list, you have legal rights

3. Home Buyers with Substantial Payments Deserve Protection

Buyers who paid almost entire consideration years in advance
Should not be reduced to mere refund claimants
Denying possession after verification causes grave injustice

🧭 Your Action Plan: Protecting Your Home Investment

🏠 If You Are a Home Buyer in an Insolvent Project:

🕒 Immediate Steps (When Insolvency Starts)

Submit claim immediately after public announcement
Use prescribed Form-CA for home buyers
Submit through approved methods only (email/designated address)
Keep proof of submission -- acknowledgment receipt/email confirmation
Don't rely on project office submissions unless specified

📅 If You Missed Initial Deadline

Watch for Resolution Professional's communications inviting resubmission
Resubmit immediately when invited
Follow up regularly on claim status
Document all communications with Resolution Professional
Check published creditor lists for your name

⚖️ If Your Claim is Verified But Denied

File application with NCLT for enforcement of rights
Cite Supreme Court judgment in your support
Demand possession if claim was verified and admitted
Challenge wrongful categorization as "belated claimant"

📋 Essential Documentation for Home Buyers

Original apartment buyer agreement
Payment receipts and bank statements
Claim submission proofs (emails, acknowledgments)
Correspondence with builder and Resolution Professional
Published creditor lists showing your name
Allotment letter and project details

⚖️ Key Legal Provisions Explained

📘 Insolvency and Bankruptcy Code, 2016

Section 7: Initiation of corporate insolvency
Section 15: Public announcement by Resolution Professional
Section 25: Duties of Resolution Professional
Section 31: Approval of resolution plan

📘 Resolution Plan Clauses

Understanding Your Rights

Clause 18.4(ii): For verified claims with allotment letters -- entitled to full rights
Clause 18.4(vi)(a): For existing allottees -- entitled to possession or conveyance
Clause 18.4(xi): For unverified/unfiled claims -- only 50% refund
Clause 18.4(xix): For belated claims between plan submission and approval

📅 Timeline from the Case

Year	Event
2010	Appellants book apartment in IREO Rise project
2011	Execute buyer agreement, pay ₹57.56 lakhs of ₹60.06 lakhs
2013	Possession deadline passes, builder fails to deliver
2018	File consumer complaint; NCLT admits insolvency petition
2019	Submit claim (disputed); Resolution Plan approved by creditors
2020	Resubmit claim after RP's invitation; included in creditor list
2021	Resolution Plan approved by NCLT
2023	NCLT rejects possession claim, offers 50% refund
2025	NCLAT upholds NCLT; Supreme Court allows appeal and grants possession

📘 Checklist for Home Buyers in Insolvency

✅ When Insolvency Proceedings Start

Immediately check for public announcement
Submit claim in Form-CA without delay
Use only approved submission methods
Keep acknowledgment proof safely
Monitor creditor list publications
Participate in Committee of Creditors if eligible

✅ If You Missed Initial Deadline

Watch for RP's resubmission invitations
Resubmit claim immediately when invited
Follow up until included in creditor list
Document all communications
Verify your name in published lists

✅ If Your Claim is Verified But Denied

File application with NCLT immediately
Cite Supreme Court judgments
Demand possession not refund
Challenge wrongful categorization
Seek legal assistance if needed

⚖️ Key Directions from Supreme Court

🏠 For Home Buyers:

Entitled to possession if claim verified and admitted
Not limited to refund even if claim submitted late
Resolution Professional's verification is binding
Inclusion in creditor list creates legal rights

👨‍💼 For Resolution Professionals:

Must treat verified claims as legally recognized
Cannot arbitrarily categorize claims as belated
Publication of creditor lists has statutory significance
Must ensure fair treatment of home buyers

🚨 When to Seek Legal Help

👨‍⚖️ Lawyer Essential For:

Filing claims and representations in NCLT/NCLAT
Challenging wrongful categorization in resolution plans
Enforcing rights after claim verification
Complex insolvency litigation
Representation in Supreme Court appeals

📝 You Can Handle With Support:

Initial claim submission and documentation
Basic correspondence with Resolution Professional
Monitoring creditor lists and updates
Understanding your rights under resolution plan
Initial complaints to NCLT

"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. Home buyers who invest their life savings deserve protection, not technical rejection. Once your claim is verified and admitted, you acquire full legal rights. Substantial payments made in good faith cannot be defeated by procedural technicalities. The law exists to protect bona fide home buyers, not to deprive them of their rightful homes."

⚠️ DISCLAIMER

This content is for informational purposes only and does not constitute legal advice. Consult a qualified legal professional for specific legal guidance. The information provided is based on judicial interpretation and may be subject to changes in law.

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Making Supreme Court judgments accessible and actionable for every Indian citizen navigating legal challenges.

Home Buyers' Rights in Builder Insolvency: Verified Claims Guarantee Flat Possession