Advertisement
The Supreme Court has clarified that homebuyers in projects undergoing insolvency proceedings can claim possession once their claims are verified and admitted by the resolution professional. This ruling highlights the protection of individuals who invest significant amounts in properties but face delays due to the developer's insolvency. The decision comes after cases where buyers had paid most of the property cost but could not move in because the projects were stuck under insolvency proceedings.
The Supreme Court recently ruled that homebuyers whose claims are verified and admitted in insolvency proceedings are entitled to possession of their flats. This follows concerns from buyers who had invested in housing projects but were unable to take possession due to the builder being under insolvency. Advertisement
The case involved two homebuyers from Chandigarh who had booked apartments in Mohali's Ireo Rise (Gardenia) project back in 2010, paying almost the entire sale consideration of INR 60 lakh. Despite fulfilling their financial obligations, they were not allowed possession because insolvency proceedings were initiated against the developer, Puma Realtors Private Limited, in 2018.
The court noted that individual homebuyers invest their life savings with the expectation of receiving possession, and denying them this right, even after their claims are admitted, would be unfair. The bench of Justices Sanjay Kumar and Satish Chandra Sharma observed that the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) had treated the buyers as if no claims had been filed.
The Supreme Court set aside the previous orders of the NCLT and NCLAT, directing that the buyers be given possession of their apartments within two months and that the conveyance deed be executed in their favor. The judgment also stressed that legitimate homebuyer claims must be recognized and protected in insolvency proceedings.
This ruling builds on earlier decisions where courts recognized the need to protect homebuyers from delays caused by insolvency cases and reinforces the priority of verified claims over general insolvency processes. It ensures that homebuyers are not left waiting indefinitely due to developers' financial difficulties.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
