IBC | Homebuyers Can't Be Denied Flat Possession If Their Claims Were Verified & Admitted By Resolution Professional : Supreme Court

The Supreme Court on Tuesday (Sep.9) observed that once a claim is verified and admitted by the Resolution Professional (RP), it cannot be treated as “belated” to deny substantive relief under a resolution plan.

A bench of Justices Sanjay Kumar and Satish Chandra Sharma ruled in favour of the homebuyers, holding that their verified and admitted claims could not be downgraded to 'unverified' merely because of delayed filing, especially when such treatment had wrongly denied them flat possession and confined them to a partial refund despite having paid substantial consideration.

"What is critical to note is that this is not a case of entertaining a fresh claim beyond the Resolution Plan. It concerns an allottee whose claim was verified and admitted by he Resolution Professional and reflected in the list of financial creditors well before approval of the Plan by the Adjudicating Authority. To disregard such an admitted claim and confine the Appellants to the limited benefit under Clause 18.4(xi) is not to preserve the binding effect of the plan but to misapply it. 

Relegating bona fide allottees, who have paid substantial consideration years in advance, to the status of mere refund claimants runs contrary to the very object of the legislative framework…. To deny them possession today, despite their claim having been duly verified and admitted, would inflict unfair and unwarranted prejudice.”, the Court said.

The appellants had booked an apartment in 2010, paying ₹57.56 lakh of the ₹60.06 lakh consideration. When the developer failed to deliver possession, insolvency proceedings were initiated against them in 2018.

Though the Resolution Profession initially disputed receipt of their claim in January 2019, he later invited creditors to resubmit claims in early 2020. The appellants complied, and their claim was duly verified and included in the RP's list of financial creditors in April 2020.

However, when the resolution plan, approved by the Committee of Creditors (“CoC”) in August 2019 and by the NCLT in June 2021, was implemented, the Resolution Applicant refused to grant possession. Instead, it placed the appellants under the residuary clause (Clause 18.4(xi)) meant for unverified or unfiled claims, limiting them to a refund. Both the NCLT and NCLAT upheld this treatment.

Setting aside the impugned decision, the judgment authored by Justice Sharma observed that once a claim is verified and admitted by the RP, it becomes part of the insolvency process and cannot later be disregarded.

The Court noted that the Adjudicating Authorities erred in downgrading the Appellant's claim to be unverified without acknowledging the fact that they paid a substantial consideration to book a flat.

"The facts of the present case highlight the plight of individual homebuyers, who invest their life savings in the hope of securing a roof over their heads. The Appellants had paid nearly the entire sale consideration as far back as 2011. To deny them possession today, despite their claim having been duly verified and admitted, would inflict unfair and unwarranted prejudice," the Court said.

Resultantly, the appeal was allowed, directing the Resolution Applicant to execute the conveyance deed and hand over possession of the flat to the appellants within two months.

Cause Title: AMIT NEHRA & ANR. VERSUS PAWAN KUMAR GARG & ORS.

Citation : 2025 LiveLaw (SC) 882

Click here to read/download the judgment

Appearance:

For Appellant(s) Mr. Aditya Wadhwa, Adv. Ms. Sonal Sarda, Adv. Ms. Noyonika Deori, Adv. Mr. R. Ilam Paridi, AOR Mr. Aman Kumar, Adv. Mr. R. Vishnu Kumar, Adv. Mr. Saurav Beniwal, Adv. Mr. Sidhant Verma, Adv. Ms. Mansi Vats, Adv.

For Respondent(s) Mr. Vaibhav Mishra, AOR Ms. Anuja Pethia, AOR Mr. Noor Shergill, Adv. Mr. Rishabh Govila, Adv. Mr. Rishabh Nigam, Adv. Mr. Himanshu Gupta, Adv. Mr. Manoj C. Mishra, AOR