Business problem solving process (CIRP) of KV Developers Private Limited was initiated by the NCLT. The claim of certain real estate buyers was dismissed by Resolution Professional (RP) as it was added later. Pursuant to the same, the consumers preferred to file a petition before the NCLT. However, the same was rejected on the grounds that the claims were filed late. Aggrieved, the home buyers filed the present complaint before the NCLAT.
The issue that came up before the NCLAT is whether RP is forced to apply for the purchase of houses even though no such applications have been filed yet? and, Whether the RP is obliged to include all the information of the real estate buyers in the information memorandum disclosed in the corporate debtor’s records?
The NCLAT, seeing the difficulty of the home buyers to file their applications pointed out that it is not necessary for all the home buyers living in different areas to know about the CIRP of the debtor company and file their applications on time. Therefore, such delay in submission of claims is a common practice in real estate projects. Further, the NCLAT concluded that the claims excluded by the home buyers should be included in the RP information memorandum if the same appears in the corporate debtor’s records. While noting the purpose of the CIRP, the NCLAT suggested that if such petitions are not considered by the RP, it will lead to inequitable and unfair arbitration and defeat the very purpose of the CIRP. Therefore, the NCLAT directed the RP to send the details of the overdue applications of the home buyers to the successful resolution petitioner, after which the resolution petitioner will prepare an addendum to the resolution process and place it before the Creditors Committee (The CoC) for consideration.