The National Company Law Tribunal, New Delhi Bench, has dismissed a challenge filed by an individual homebuyer seeking to reject a resolution plan for Spaze Towers Pvt. Ltd. In a significant ruling for the real estate insolvency sector, the bench, comprising Judicial Member Mahendra Khandelwal and Technical Member Atul Chaturvedi, upheld the right of a resolution applicant to classify creditors differently based on the nature of their underlying contractual documents, even when all parties fall under the broader definition of financial creditors.

The applicant, Mukesh Kakar, had challenged the resolution plan submitted by Siddharni Estate, which was approved by the Committee of Creditors in November 2025. Kakar, who held a Memorandum of Understanding with the corporate debtor, argued that the plan was discriminatory because it allocated ₹12 crore to unit holders with Builder Buyer Agreements while providing only ₹2 crore for those holding Memoranda of Understanding. The applicant contended that this created an arbitrary "class within a class," resulting in a negligible one-time settlement compared to the amounts owed.

However, the tribunal categorically rejected these arguments, emphasizing that the Code does not mandate mathematical equality among all subsets of creditors. The ruling clarifies that the mere existence of different contractual structures—such as Builder Buyer Agreements versus Memoranda of Understanding—provides a rational basis for the Committee of Creditors to negotiate differential payment terms. According to the bench, the classification of creditors is a matter of commercial evaluation, and once the requisite majority of a class approves a plan, individual dissenters cannot disrupt the process by asserting personal grievances.

Prioritizing Commercial Wisdom and Collective Bargaining

The tribunal leaned heavily on the principle of commercial wisdom, which prevents judicial interference in the business decisions reached by a majority of the Committee of Creditors. Citing established legal precedents, the bench noted that an individual homebuyer lacks the standing to challenge a plan that has already been approved by the broader class of homebuyers represented by an authorized representative. The order stated: “The mere fact that both categories broadly fall within the category of real estate allottees does not mean that the Resolution Plan is prohibited from recognising distinctions arising from the nature and terms of the underlying contractual arrangements.”

This decision underscores the high threshold for challenging an approved plan. By affirming that the resolution process is a collective bargaining exercise, the tribunal effectively blocked individual attempts to re-negotiate settlement terms that were deemed acceptable by the majority. The bench observed that the legislative intent behind the insolvency framework is to prioritize the resolution of the corporate debtor over the individual recovery aspirations of minority creditors, provided the plan complies with mandatory statutory requirements.

Addressing Structural and Conflict-of-Interest Allegations

Beyond the issue of creditor classification, the applicant had raised concerns regarding the viability of the project and potential conflicts of interest. Specifically, it was alleged that one of the partners of the resolution applicant was related to a landowner associated with the project, which the applicant claimed should trigger disqualification under the Insolvency and Bankruptcy Code. The tribunal examined these claims but found that such a relationship, without proof of specific disqualification criteria under the relevant sections of the Code, did not render the resolution applicant ineligible.

Furthermore, the tribunal dismissed contentions that the plan was "liquidation-like" because it did not mandate the physical completion of every project. The court noted that the insolvency law does not prescribe a singular model for resolution; whether a plan offers a viable financial outcome through cash settlement or asset transfer is a matter entirely within the discretion of the lenders. Regarding the applicant’s plea for inviting fresh bids, the tribunal viewed this as speculative, stating that the possibility of a theoretically better offer does not justify setting aside a plan that has already satisfied the democratic mandate of the Committee of Creditors.

Stability for Future Resolution Processes

This judgment serves as a vital affirmation of the current insolvency landscape, providing clarity on the flexibility afforded to resolution applicants in the real estate sector. By validating the distinction between different categories of homebuyer contracts, the tribunal has provided a roadmap for how future plans can address complex creditor structures without falling prey to constant litigation from minority interest groups. The ruling maintains that as long as the distribution of funds follows the procedural mandates of the law, the specific economic trade-offs decided by the lenders will remain shielded from judicial intervention.

The application, I.A. 6166 of 2025, was ultimately dismissed with no order as to costs, effectively allowing the resolution process for Spaze Towers Pvt. Ltd. to proceed without the modifications sought by the applicant. With this order, the tribunal has reaffirmed that the sanctity of the voting process, governed by the majority, remains the cornerstone of the insolvency resolution framework, ensuring that projects can move forward rather than being stalled by individual litigation. The case stands as a firm reminder that within the insolvency process, the commercial consensus of the creditors’ committee takes precedence over the individual preferences of any single participant, reinforcing the procedural stability necessary for large-scale real estate projects.