The dismissal of the application under Section 65 demonstrates that mere allegations of malice and fraud in insolvency proceedings require substantiation with clear evidence; insufficient for halting a legitimate financial creditor's petition.

ORDER

1. The present Interlocutory Application has been filed by Mr. Hemant Yadav and others (hereinafter referred to as the “Applicants”) under Section 65 of the Insolvency and Bankruptcy Code, 2016 (“the Code”), seeking a declaration that the petition bearing CP(IB) No. 45/CHD/HRY/2024, filed by IDBI Trusteeship Services Limited (“Respondent No. 1”) under Section 7 of the Code against M/s Vatika Limited (“Respondent No. 2”/“Corporate Debtor”), has been initiated fraudulently and with malicious intent for a purpose other than the resolution of insolvency. The Applicants, being homebuyers and allottees in the RERA- approved affordable housing project “Aspiration”, Sector 88B, Gurugram, developed under the Deen Dayal Jan Awas Yojana (DDJAY), have further sought imposition of exemplary costs on Respondent No. 1 under of the Code, contending that the initiation of the proceedings has been made with an oblique motive to pressurize the Corporate Debtor, despite Respondent No. 1’s own failure to issue the requisite No Objection Certificates (NOCs) to homebuyers after receipt of full sale consideration, thereby jeopardizing the rights of genuine homebuyers who are also recognized as financial creditors under Section 5 (8)(f) of the Code read with the provisions of the Real Estate (Regulation and Development) Act, 2016 .

SUBMISSIONS OF THE APPLICANT

2. The Applicant has submitted as under:

i) It is submitted that the Applicants are allottees within the meaning of Section 5 (8)(f) of the Code read with Sections 2(d) and 2(zn) of the Real Estate (Regulation and Development) Act, 2016 (“RERA”), having been allotted plots in the RERA-registered project “Aspiration”, Sector 88-B, Gurugram, developed under the Deen Dayal Jan Awas Yojana (DDJAY) scheme.

ii) It is stated that Applicant No. 1 – Hemant Yadav was allotted Plot No. 39 vide Allotment Letter dated 10.02.2023 and Builder Buyer Agreement dated 17.10.2023; Applicant No. 2 – Rakesh Vasandani was allotted Plot No. 38 vide letters dated 10.10.2022 and 17.01.2023; Applicant No. 3 – Pratul Kumar Madan was allotted Plot No. 31 vide letters dated 31.10.2022 and 17.02.2023; and Applicant No. 4 – Mukesh Yadav was allotted Plot No. 42 vide letters dated 16.02.2024 and 23.05.2024.

iii) The Applicants have paid the entire sale consideration aggregating between ₹ 63 lakhs to ₹ 96 lakhs each, as per their respective Schedules of Payments, yet the possession of the plots and execution of conveyance deeds have not been completed by the Corporate Debtor – Vatika Limited.

iv) It is contended that the Applicants were informed by Respondent No. 2 (Corporate Debtor) that the No Objection Certificates (NOCs) from Respondent No. 1 (IDBI Trusteeship Services Ltd., acting as Debenture Trustee) were pending, and that non-issuance of these NOCs had hindered the handover of plots to the homebuyers.

v) Upon further enquiry, the Applicants learnt that Respondent No. 1 has filed a petition under Section 7 of the Code against Vatika Limited, claiming to be a Financial Creditor by virtue of a Debenture Trust Deed and Escrow Agreement dated 12.11.2022, seeking initiation of CIRP against the Corporate Debtor for its own debt recovery, thereby jeopardizing the interests of hundreds of homebuyers who are also Financial Creditors under the Code.

vi) The Applicants rely upon the judgment of the Hon’ble Supreme Court in Mansi Brar Fernandes v. Shubha Sharma & Anr., (2025) ibclaw.in 353 SC which recognised the Right to Shelter as an integral part of Article 21 of the Co