Allottees with a decree under RERA remain Financial Creditors under the Insolvency and Bankruptcy Code and must comply with the threshold requirements for initiating Corporate Insolvency Resolution Process.

ASHOK BHUSHAN, J. Interlocutory Application Nos. 905 and 1032 of 2024 IA No.905 of 2024 has been filed by the Appellant for condoning the delay of 51 days in refiling the Memo of Appeal. IA No.1032 of 2024 has been filed by the Appellant for condoning the delay of 9 days in filing of the Appeal. Sufficient cause being shown, the delay in refiling, as well as delay in filing of the Appeal is hereby condoned. IA Nos.905 and 1032 of 2024 are accordingly disposed of.

Company Appeal (AT) (Insolvency) No. 309 of 2024 This Appeal by Financial Creditor of the Corporate Debtor–Parsvnath Landmark Developers Ltd. (Respondent herein) has been filed challenging order dated 17.10.2023 passed by National Company Law Tribunal, New Delhi, Principal Bench rejecting Section 7 Application filed by the Appellant on the ground of non-compliance of Section 7, sub-section (1), 2nd Proviso.

2. Brief facts of the case necessary to be noticed for deciding the Appeal are:

• (i) The Respondent developed a Project ‘La Tropicana Khyber Pass Delhi’. The Appellant made payment to the Respondent in the year 2007-2012 towards 4 units, which was allotted in favour of the Appellants by Respondent.

• (ii) On 11.02.2019, the Appellant filed petition being CP No.IB- 443(PB)/2019 titled as Rahul Gyanchandani & Ors. vs. Parsvnath Landmark Developers Pvt. Ltd. & Ors. under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “Code”), in which direction was issued by the Adjudicating Authority to comply with the changed provisions under Section 7, second amendment ordinance. The Appellant withdraw the Application on 03.01.2020. (iii) As the developer failed to develop the Project and complete the same within the agreed time, the Appellant filed five different complaints under Section 31 read with Section 18 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the “RERA Act, 2016”) being Complaint Nos. 77, 78, 79, 80 and 81 of 2020 seeking refund of the amount paid by them along with interest in terms of the Flat Buyer Agreement dated 21.08.2007. All the five complaints were disposed of by Delhi RERA on 21.10.2022 allowing the complaints and directing the refund of the amount with interest. The Respondent was under obligation to refund the amount within 45 days of the order, but no amount was paid by the Respondent.

• (iv) On 03.08.2023, Appellants filed petition (IB) No.454(PB)/2023 under Section 7 praying for initiation of Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor, it having committed default by not refunding the amount payable to all the four Appellants, along with interest. Each Appellant was required to be paid an amount of Rs.24.14,50,504/- along with interest @10% per annum.

• (v) The Adjudicating Authority by the impugned order rejected Section 7 Application on the ground that the Appellants are only four in number, whereas total units allotted by the Corporate Debtor were 488. In paragraph-1 of the impugned order, following has been noticed by the Adjudicating Authority:

• “1.

• Indubitably the captioned petition has been preferred by 4 Petitioners while the total number of allottees qua the CD is 488. As can be seen from the proviso under Section 7(1) of the IBC, 2016, a petition on behalf of the Homebuyers (as Financial Creditors in a class) is maintainable only if either 100 in number or 10% of the allottees join the petition. Apparently, the Petitioners before us are neither 100 in number nor are they 10% of the allottees. Thus exercise of the petition is not maintainable.”

• (vi) The Adjudicating Authority relying on the judgment of the Hon’ble Supreme Court in Vishal Chelani & Ors. vs. Debashis Nanda in Civil Appeal No.3806 of 2023, dismissed Section 7 Application. In paragraph 5 of the judgment, following has been noted:

• “5.

• While the judgement in “Kotak Mahindra Bank Ltd. Vs. A. Balakrishnan & Anr.” is distinct in facts, we find that the vie