Homebuyers cannot claim possession after electing for a refund; finality of RERA order prevails in insolvency proceedings.

ORDER

1. This present application is filed on 19.02.2025, by 7 Homebuyers/allotees namely:- Rachna Mehra, Rajiv Mehra, Anil Nagpal, Atul Nagpal, Gama Investments Pvt. Ltd., Anuj Mehra and Rakesh Mehra (hereinafter collectively referred as “Applicants”) under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“Code”) read with Rule 11 of NCLT Rules, 2016 against the Resolution Professional (hereinafter referred as “Respondent/RP”) of Jaiprakash Associates Limited i.e., Corporate Debtor. The Applicant inter alia seeks the following prayers:

“(1) Pass an appropriate order setting aside the Impugned decision dated 30-8-2024 and 27-9-2024 and the subsequent undated Note/decision circulated on 4.10.2024 by RP thereby cancelling units of the Applicants.

(2) Pass an ad interim order directing the Resolution Professional not to create any third-party rights over the units which were to be allotted to the Applicants till the pendency of the present application.

(3) Pass an appropriate order directing the Resolution Professional of the corporate debtor to hand over the possession of the units to the Applicants and execute Sub-lease deeds for the units.

(4) Pass such other and/or further Order/s as this Hon'ble Tribunal may deem fit and proper.”

2. The brief facts as submitted by the Applicant are as follows:

a. The Applicants were allotted the following residential flats in the year 2011-12 in the project, namely “Knights Court” situated at Jaypee Greens Wish Town of the Corporate Debtor:

b. In light of the said allotments, the units were to be delivered in 36 months, and the Applicants allege to have paid a huge collective sum of money of more than Rs. 8 crores in lieu of the allotted residential units to the Corporate Debtor.

c. However, the Corporate Debtor failed to deliver the possession as per the timeline stipulated in the allotment letter, along with the assurances made. Consequently, the Applicants filed a complaint against the Corporate Debtor before the UPRERA for seeking a refund of the amount, along with interest due to the failure in completion and construction of the project. In reply to the proceedings before the UPRERA, the Corporate Debtor justified the delay and reassured to complete the project. Meanwhile, due to the efforts of the Homebuyers Association of Knights Court Project and UP-Rera, construction activity was resumed at the project site. The Corporate Debtor, subsequently, issued a legal protection letter dated 11.01.2021 promising to hand over the possession to Homebuyers. As a result, the applicants moved an amendment application in a pending complaint and sought possession instead of a refund of the amount. The said amended relief was allowed by UP-RERA vide orders dated 13.09.2021 and 27.09.2021.

d. In the meantime, UP-RERA also passed a detailed order dated 29.01.2021 U/s.8 of RERA Act r/w Rule 11 and s. 37 of the Act wherein directions were given to the Corporate Debtor for completion of the project and delivery of possession to all homebuyers of the project within 15 months. However, despite the expiry of 15 months, the corporate debtor/builder neither handed over possession nor refunded any amounts to the Applicants.

e. Subsequently, vide a common order dated 08.03.2022, UP RERA directed the Corporate Debtor to hand over the possession along with a delay penalty to one of the other batches of complaint cases of Home Buyers of the same Knight Court Project. However, on 19.04.2022, the UP RERA in the Applicant’s case erroneously ordered a refund instead of possession as sought by Applicants after the amendment of the prayer. Subsequently, a recti