Allottee Does Not Cease To Be Financial Creditor On Ground Of Being Speculative Investor: NCLT Chandigarh

The present application has been filed under section 60(5) read with section 21 of the Insolvency and Bankruptcy Code, 2016 (IBC) to exclude the Respondents from the Committee of Creditors (CoC) as they are not financial creditors or allottees but business/services providers and speculative investors.

The Applicant submitted that the Respondent no(s) 2 and 3 were speculative investors and are not genuine home buyers and hence, their claims cannot be admitted.

Per contra, the Respondent submitted that the Applicant is a chronic litigant and is trying to disrupt the CIRP and has raised preliminary objection on the maintainability of the Application on the ground of res judicata and unclean hands of the Applicant. There is no anomaly in admission of the claims of the Respondent Nos. 2 and 3.

It was further submitted that if the averment of the Applicant is to be accepted that only those allottees whose name appear in the balance sheet, then all the other claims filed with the IRP/RP are null and void, which is not the case.

The Tribunal observed that the Applicant's submissions that the Respondent Nos 2 and 3 should be excluded from the CoC as their claims were not reflected in the balance sheet of the Corporate Debtor was rejected. It held that the balance sheet is not the sole determinant for admission of the claim.

It further observed that the Applicant also contended that the Respondents were speculative investors where as per terms of the Agreements executed between the parties, the units were to be developed by the Corporate Debtor which were in turn to be marketed and sold by the Respondents.

The Tribunal while relying on the Judgment of the National Company Law Appellate Tribunal (NCLAT) in Everlike Real Estate & Developers Pvt. Ltd. Vs. Mr. Mohit Goyal held that even if an allottee qualifies to be a speculative investor, they are still to be considered as financial creditor. Although Speculative Investors are prohibited from initiating Corporate Insolvency Resolution Process (CIRP), their claims can be admitted as financial creditors in a class. Therefore, the claims of an allotee cannot be rejected solely on the ground that he is a speculative investor. Accordingly, this contention of the Applicant was rejected.

It further observed that the Applicant has not tendered any reply to the Respondent's submission where it was contended that the Respondents ceased to be related parties in 2014 before initiation of the CIRP thereby negating the Applicant's allegations. The Applicant also contended that since the Respondents were struck off under section 248 of the Companies Act, their claims cannot be admitted. The Tribunal while agreeing with submission of the Respondents held that section 250 of the Companies Act allows the creditors to recover dues and seek discharge of liabilities even if the company is struck off.

It concluded that this principle was fortified by the Delhi High Court in A.B. Creations and Anr. V. Bhan Textiles Pvt. Ltd., (2024) where it was held that striking off the name of the company does not bar legal remedies by or against the company. Accordingly, the present application was dismissed.

Case Title:Tajinder Pal Setia Vs. Sh.Arvind Kumar, Resolution Professional and Ors.

Case Number: IA (I.B.C)/2105(CH)2023 in CP(IB) No. 248/Chd/Chd/2019

Order Date: 02/07/2025

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