Tejinder Pal Setia vs Sh. Arvind Kumar Resolution ...

[Arising out of the Impugned Order dated 02.07.2025 passed by the Adjudicating Authority, National Company Law Tribunal, Chandigarh Bench in I.A. No.2105/2023 in C.P. (IB) No. 248/Chd/Hry/2019] In the matter of: TEJINDER PAL SETIA S/O LATE SH. B.K. SETIA SUSPENDED DIRECTOR OF THE CORPORATE DEBTOR I.E. CHANDIGARH OVERSEAS PVT. LTD. R/O 131, A- BLOCK, MEERA BAG, DELHI- 110087 .... Appellant Versus

1. SH. ARVIND KUMAR, RESOLUTION PROFESSIONAL CHANDIGARH OVERSEAS PVT. LTD. REGD. OFFICE AT: SCO NO. 249, BASEMENT, SECOTR 44-C, CHANDIGARH - 160047 EMAIL: irpcopl@gmail.com .... Respondent No.1 2. M/S. ACCORD INFRA DEVELOPER PVT. LTD. THROUGH ITS DIRECTOR/ AR REGD. OFFICE AT: SHOP NO. P11, NEAR ESI, DISPENSARY MILAN CINEMA ROAD, KARAMPURA, DELHI WEST- 110015 EMAIL: accounts.axiom@gmail.com .... Respondent No.2 3. M/S. MOHALI HI-TECH BUILDERS AND PROMOTERS PVT. LTD. THROUGH ITS DIRECTOR/ AR REGD OFFICE AT: HOUSE NO. 989, SECTOR 69, MOHALI EMAIL: pathaniaca@airtelmail.in .... Respondent No.3 4. DEPARTMENT OF INCOME TAX THROUGH ITS JOINT COMMISSIONER OFFICE AT: LIVE STOCK COMPLEX, SECTOR 63, MOHALI .... Respondent No.4 5. DEPARTMENT OF INCOOME TAX THROUGH ITS PRINCIPAL COMMISSIONER OFFICE AT PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, DELHI .... Respondent No.5 6. REGISTRAR OF COMPANIES THROUGH ITS REGISTRAR OFFICE AT: CORPORATE BHAWAN, SECTOR-27, CHANDIGARH .... Respondent No.6 7. REGISTRAR OF COMPANIES THROUGH ITS REGISTRAR OFFICE AT: 4TH FLOOR, IFCI TOWER, 61, NEHRU PLACE, NEW DEHI- 110019 .... Respondent No.7

Present: For Appellant : Mr. Paras Mithal, Mr. Prabhar Mithal and Mr. Arjun Katyal, Advocates.

For Respondent : Mr. Atul V. Sood, Advocate for RP. Mr. Abhijeet Sinha Sr. Advocate with Mr. Rajat Gautam, Advocates for R2 and R3. Mr. Sarjit Bhadu Sr. Advocate with Mr. Aditya Soni, Advocates for Homebuyer.

JUDGMENT

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal filed under Section 61 of Insolvency and Bankruptcy

Code 2016 ('IBC' in short) by the Appellant arises out of the Order dated

02.07.2025 (hereinafter referred to as 'Impugned Order') passed by the

Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench-I)

in I.A. No. 2105(CH)/2023 in C.P. (IB) No. 248/Chd/2019. By the impugned

order, the Adjudicating Authority has dismissed the I.A. No. 2105 of 2023 filed

Page 2 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 by Appellant- Suspended Director of Chandigarh Overseas Pvt. Ltd. Aggrieved by

the impugned order, the present appeal has been preferred by the Appellant.

2. Coming to the factual matrix of the present case at hand, the Corporate

Debtor-Chandigarh Overseas Pvt. Ltd. ("COPL" in short) was admitted into CIRP

on 27.02.2023 by the Adjudicating Authority. This admission order though

challenged before this Tribunal and the Hon'ble Supreme Court attained finality

on 06.09.2023. Basis the claims received, the Resolution Professional ("RP" in

short) constituted the Committee of Creditors ("CoC" in short) on 28.07.2023.

The present Appellant, suspended director of the Corporate Debtor filed IA No.

2105 of 2023 in November 2023 before the Adjudicating Authority inter-alia

challenging the constitution of the CoC and seeking exclusion of two entities

namely, M/s Accord Infra Developers Pvt. Ltd. ("Accord" in short) and M/s

Mohali Hitech Builders and Promoters Pvt. Ltd. ("Mohali Builders" in short)

from the CoC on the ground that they were neither Financial Creditors nor Class

of Creditors-Homebuyers/Allottees besides directing enquiry and investigations

into their affairs and declare all resolutions passed in the first CoC meeting by

the illegally constituted CoC to be illegal. The Adjudicating Authority on

02.07.2025 passed the impugned order dismissing IA No. 2105 of 2023.

Aggrieved by the impugned order, the present appeal has been preferred by

suspended director of the Corporate Debtor.

3. Making submissions on behalf of the Appellant, Shri Paras Mithal, Ld.

Counsel submitted that the Adjudicating Authority committed a mistake in

constituting the CoC with Respondent No.2-Accord and Respondent No.3-Mohali

Builders as members therein at a time when they were neither Financial Page 3 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 Creditors nor Allottees/Homebuyers in terms of the IBC framework. It was

contended that Respondent No.2 and Respondent No.3 were speculative

investors who had usurped creditor status in collusion with erstwhile

management and should be excluded from the CoC. It was emphatically

asserted that the Agreements dated 24.06.2011 and 26.02.2012 which was

relied upon by the Respondent No.2 and the Agreement dated 29.06.2009 by the

Respondent No.3 clearly show that the Respondents were not

allottees/homebuyers but were promoters and marketers of the housing projects

which were developed by the Corporate Debtor. It was vehemently contended

that the arrangements contained in these Agreements clearly show that the

Respondents were vested with the right to sell, advertise, rename the project and

even execute sale documents for third parties. The Respondents also failed to

demonstrate that they were allotted any specific unit in the housing project

under the said Agreements and had failed to establish themselves as 'allottees'

under the provisions of IBC or Real Estate (Regulation and Development) Act,

2016 (hereinafter referred to as "RERA Act"). It was vehemently contended by

the Appellant that the Respondents No.2 and 3 were not allottees and keeping

in mind their conduct and actions as well as their status as defined under the

Agreements clearly bring them within the purview of a 'Promoter' of a real estate

project in terms of RERA Act. The agreement of marketing and reselling was

clothed with the colour of a builder-buyer agreement but in reality, the

Respondents were business partners and the agreements executed by them with

the Corporate Debtor were collusive agreements to defraud the Corporate

Debtor. In support of their contention, reliance has been placed on the judgment Page 4 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 of Madhya Pradesh Real Estate Appellate Tribunal in Bhopal Development

Authority vs. Roop Laxmi Singh (2026) ibclaw.in 13 REAT where it has been

held that a co-promoter cannot be considered an allottee, even if there is any

condition for any consideration amount to be received under the relevant

agreements. It was therefore clear that the collusive arrangement contemplated

under the Agreements was not for possession of units by Respondent No.2 and

3 as allottees but was a cover-up of their role as a promoter/speculative investor.

It was further submitted that the RP had admitted unverified and unaccounted

claims of the Respondents which were not supported by the financial statements

of the Corporate Debtor or Respondents. The claims of Respondents No.2 and 3

should have been rejected by the RP and they should have been denied a berth

on the CoC as a Financial Creditor. It was also asserted that Respondents No.2

and 3 misused their position in the CoC by controlling the decision-making

process of the CoC in a manner which prejudiced the interests of genuine

homebuyers and other stakeholders. Submission was also made that the RP did

not undertake any forensic audit despite allegations of collusion, diversion of

assets and fraudulent transactions having been made. That the conduct of the

RP was also doubtful is further substantiated by the fact that the RP has been

suspended by the IBBI for having made similar admission of inadmissible claims

of ineligible parties in another CIRP.

4. Refuting the contentions of the Appellant, Shri Abhijit Sinha, Ld. Sr.

Counsel on behalf of Respondents No.2 and 3 submitted that the Appellant,

being the erstwhile Director of the Corporate Debtor, lacked locus to assail the

impugned order with respect to the composition, constitution and functioning of Page 5 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 the CoC. It was contended that since the Agreements of 2009, 2010 and 2012

were all executed by the Respondents No.2 and 3 with the previous management

before the Appellant had become a director of the Corporate Debtor, the

Appellant did not have the benefit of first-hand knowledge of the circumstances

in which the Agreements were executed or aware of the purpose of execution of

the Agreements. In any case, the reliefs claimed in the present appeal

challenging the dismissal of I.A. No. 2105 of 2023 seeking exclusion of

Respondents No.2 and 3 from the CoC and denial of their treatment in the

category of homebuyers and declaration of all decisions of the CoC as illegal

cannot be pressed by the Appellant after having ceased to be in management of

the Corporate Debtor. It was also added that the ground taken by the Appellant

that the claim of Respondents No.2 and 3 was not reflected in the financial

records also lacked merit as it was not made on the basis of supporting

documents but premised on personal knowledge, the sanctity of which needs to

be discounted when dealing with the issue of claims. It was contended that

balance sheet is not the sole or conclusive basis for admission of claims as in

terms of Regulation 8A of the CIRP Regulations, 2016, the existence of debt due

to a creditor in a class can also be established through an agreement for sale,

letter of allotment, receipt of payment made, or any other document evidencing

the existence of a debt. It was also asserted that the present appeal is nothing

but an attempt to derail the CIRP process of the Corporate Debtor. It was also

asserted that the Appellant has tried to unnecessarily transpose the provisions

of the RERA Act to the IBC framework particularly in attempting to import the

definition of the term 'promoter' from the RERA Act, 2018 which cannot be Page 6 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 allowed since the IBC is self-contained legislative enactment and only permits

definition of two specific terms from the RERA Act. It was also pointed out that

the contention of the Appellant that since Respondents No.2 and 3 had been

allotted multiple units in the real estate project, they cannot be held as

homebuyer allottees is also a misplaced contention since there is no prohibition

under RERA against the allotment of multiple units to a single allottee.

Accordingly, any attempt by the Appellant to rely on the RERA definition of

"Promoter" to deny the status of a genuine allottee under the IBC to the two

Respondents No.2 and 3 is misconceived and contrary to the statutory

framework. It was emphatically asserted that there is no bar to the admission of

claims even if the allottee is treated as a speculative investor, so long as the

essential criteria of financial debt under Section 5(8)(f) of the IBC are satisfied.

Reliance was placed on the judgment of this Tribunal in Everlike Real Estate

& Developers Pvt. Ltd. Vs Mr. Mohit Goyal in CA(AT)(Ins) No. 978 of 2024.

It was also contended that the Hon'ble Supreme Court in its judgement in Mansi

Brar Fernandes Vs Subhha Sharma in Civil Appeal No.3826 of 2020 also

reinforces the position that that once the essential ingredients of a financial debt

are satisfied, the label of being a "speculative investor" is not sufficient to

disqualify an allottee from being treated as a financial creditor. These decisions

clearly support the inclusion of Respondent Nos. 2 and 3 in the category of

allottees whose claims are based on valid agreements, payments made and

where transactions are backed by documentation.

5. Supporting the contentions raised on behalf of the Respondents No.2 and

3, similar arguments were canvassed by Shri Atul V. Sood, Ld. Counsel for the Page 7 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 RP. It was asserted that apart from the fact that the Appellant had no locus to

file the appeal being the suspended director of the Corporate Debtor, it was

submitted that the Appellant was a chronic and vexatious litigant who has been

persistently trying to disrupt the CIRP process at a time when the resolution

plan has already been approved by the CoC with 99.21% vote share. The RP

submitted that the claims of Respondents No.2 and 3 had been accepted by the

RP basis the documents provided by them because no other information/data

was available with the RP as the Appellant had been non-cooperative in sharing

relevant information. This non-cooperation is evident from the fact that they

provided the books of accounts of the Corporate Debtor on 17.09.2023 which

was more than six months after the admission of the Corporate Debtor into

insolvency. It was also contended that once a homebuyer/allottee pays money

for acquisition of units or tenders an advance, such a homebuyer/allottee

acquires the status of a Financial Creditor under Section 5(8)(f) of the IBC. The

status of such a homebuyer to be deemed as a speculative investor is relevant

only at the stage of admission of Section 7 application since a speculative

investor though precluded from filing a Section 7 application but is not

precluded from filing claims after the Section 7 application is admitted.

Submission was pressed by the RP that the Appellant had filed Civil Appeal No.

5533-34 of 2023 before the Hon'ble Supreme Court in which similar grievances

had been raised which was rejected by the Hon'ble Apex Court. This shows that

the Appellant is trying to frustrate the CIRP process by indulging in forum

shopping. On the issue that Respondents No.2 and 3 are related parties of the

Corporate Debtor, it was contended that the test of related party is laid down in Page 8 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 the judgment of Hon'ble Supreme Court in Phoenix ARC Pvt. Ltd. Vs Spade

Financial Services Ltd. & Ors in Civil Appeal No. 2842 of 2020 wherein it

has been held that if a Financial Creditor is not a related party in praesenti, he

would not be debarred from being a member of CoC. Since the Respondents No.2

and 3 have ceased to be a related party from 2014, and CIRP was initiated after

2014, there is no substance in the contention of the Appellant. It was vehemently

contended that the Adjudicating Authority having considered all the issues

raised by the Appellant before passing a well-reasoned impugned order, it did

not warrant any interference by the Appellate Tribunal.

6. An Intervention Application No. 6574 of 2025 has been filed by the

Authorised Representative of the homebuyers in the CIRP of the Corporate

Debtor contending that they may be allowed to intervene in the matter opposing

the contentions of the Appellant for obstructing the CIRP process of the

Corporate Debtor.

7. We have duly considered the arguments advanced by the Learned Counsel

for the parties and perused the records carefully. The short question which

requires to be answered is whether there exists sufficient basis for exclusion of

Respondents No.2 and 3 from the CoC on the ground that they were neither

Financial Creditors nor Class of Creditors-Homebuyers/Allottees.

8. It is the case of the Appellant that a perusal of the recital clauses and the

terms of the Agreements of 2011 and 2012 executed between the Corporate

Debtor and Respondent No.2 and the Agreement of 2009 with Respondent No.3

clearly demonstrate that both the Respondents were promoters and marketers

of the project and not genuine homebuyers/allottees. By virtue of the Agreement Page 9 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 of 2011 executed by the Respondent No.2 with the Corporate Debtor, this entity

had made block purchase of large office spaces, commercial units and residential

units besides rebranding portions of the project of the Corporate Debtor in their

own name for onward sale by them independently. The Respondents had

undertaken independent sale of units from their allocated share for which they

executed sale deeds, entered into Buyer-Developer agreements, issued allotment

letters to third parties besides collected consideration directly from the ultimate

homebuyers which effectively rendered their status as that of a

partner/promoter and not that of an allottee. It was also added that though the

Agreement of 2011 was later re-nomenclated in 2012 from 'Agreement' to

'Agreement to Sell', in the case of Respondent No.2, this was collusively done so

as to fraudulently secure them the status of an allottee/financial creditor in

class though in reality they still continued as promoters. This is substantiated

by the fact that the subject matter as well as the consideration amount involved

in the Agreements of 2011 and 2012 remained more or less identical. The

Agreement to Sell of 2012 was thus a smoke screen to cover up the fact that the

Respondent No.2 was not an allottee but was a promoter engaged in the

marketing of the real estate project units. The Respondent No.2 continued to

remain a promoter, developer and marketer of the project who had executed

collusive agreements with the erstwhile management to hide their status. It was

asserted that both from the terms of the Agreement as well as the conduct of the

Respondent No.2, it emerges that Respondent No.2 was a promoter and not an

allottee. It was also added that the case of Respondent No.3-Mohali Builders for

claiming the status of an allottee was still weaker. The transaction between Page 10 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 Mohali Builders and the Corporate Debtor was that of a business partner who

had made speculative investment for marketing and reselling of units. The

Agreement of 2009 clearly showed that the Corporate Debtor was depicted

therein as 'Developer' while Mohali Builders has been defined as 'Promoter'. Even

the clauses of the Agreement gave liberty to the Mohali Builders to fix resale

prices, retain margins and control third-party agreements.

9. Submission was pressed by the Appellant that when both Respondents

had failed to establish that specific units were allotted to them, these entities

could not have been ascribed the status of Financial Creditor in Class. However,

the RP classified the Respondents No. 2 and 3 as Financial Creditors in a Class

without proper examination of the essence of these Agreements in question and

entertained the claims filed by them and erroneously included them in the CoC.

By admitting their claims and allowing them a berth in the CoC, this has led to

irregularities in the constitution of the CoC and led to consequential compromise

of critical commercial decisions of the Corporate Debtor. This inclusion was

therefore challenged by way of IA No. 2105 of 2023 but was erroneously rejected

by the impugned order.

10. To buttress the contention further that the Respondents were not allottees

but promoters, the Ld. Counsel for the Appellant invoked the definition of

'Promoter' in terms of the RERA Act. It was submitted that the IBC imports the

meaning of 'allottee' from the RERA Act and when Section 2(d) of the RERA Act

which defines the term 'allottee' is seen, it becomes clear that this term has been

used in contra-distinction to that of a 'promoter' which term has been defined

under Section 2(zk) of the RERA Act. It was contended that the scheme of RERA Page 11 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 provides for a mechanism to an 'allottee' to fight for their rights against the

'promoters' before the competent authority. Thus, the two terms 'allottee' and

'promoter' are mutually exclusive and hence an allottee cannot be viewed as a

promoter and vice versa. It was contended that in terms of the Agreements

executed by the Respondent No.2 and 3, both of them get squarely covered by

the definition of a 'promoter' of a real estate project and cannot be treated as an

allottee.

11. Per contra it is the case of the Respondent Nos. 2 and 3 that the Appellant

cannot claim privy to the purpose and intent behind the arrangement drawn

under the Agreements of 2009, 2011 and 2012 as it is clear from the Agreements

placed on record that the Appellant was not a party or a signatory at the time of

execution of these Agreements since they became part of the management much

later in 2014. Their understanding of the context of the Agreements was

misplaced based as it was on their own contrived assumptions and

presumptions of collusive arrangements at a time when the Agreements were

signed by the previous management. Furthermore, when the existence of the

Agreements entered into between the Corporate Debtor and Respondent Nos.2

and 3 had been in the knowledge of the Appellant since their induction as

Director of the Corporate Debtor in October 2014 and these Agreements had

never been challenged by them before any judicial or statutory forum, they

cannot be seen to raise these issues now that they have ceased to hold that

position now.

12. The over-emphasis placed by the Appellant to harp on the terms of the

2011 Agreement of Respondent No.2 to claim that the said Agreement was a Page 12 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 marketing/service arrangement which substantiated that Respondent No.2 was

not an allottee is misplaced because it is indisputable that the subsequent

Agreement of 2012 clearly records an absolute sale of property with the right to

further sell. Further, the Agreement with Respondent No.3-Mohali Builders was

also clearly an Agreement to Sell and mere nomenclature of "Promoter" in the

recital of parties cannot override the substance of the transaction. Further the

reference to Respondent No.3 as promoter in the Agreement of 2009 is

immaterial and irrelevant as the Corporate Debtor was registered as a promoter

with the RERA authorities. Further, there is no denial of the fact that the

Respondents had made payments for the allotments, even if they were multiple

allotments, and payments having been made by them, they cannot be denied the

right to lodge their claims and become members of the CoC.

13. It was also asserted that the Appellant has tried to unnecessarily

transpose provisions of the RERA Act to the IBC framework beyond the confines

laid down in specific terms by explanation (ii) to Section 5(8) of the IBC. It was

also contended that the judgment of Madhya Pradesh Real Estate Appellate

Tribunal in Bhopal Development Authority supra relied upon by the Appellant

is inapplicable as the facts in that case are distinguishable in that it related to a

dispute between co-promoters in a Joint Venture Agreement concerning

development rights over land which had been taken up under the provisions of

the RERA Act and did not deal with any issue relating to insolvency, financial

debt, determination of status as a financial creditor or the CIRP process under

the statutory framework of IBC.

Page 13 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025

14. Coming to our analysis and findings, having heard the rival contentions

of the parties herein and having perused the Agreements of 2009, 2011 and

2012, we are inclined to agree with the Respondents No.2 and 3 that the

Appellant has inordinately preened too much into the recital and clauses of the

Agreements to deliberately obfuscate the status of the Respondents No.2 and 3

from that of allottees to that of a non-allottee and a non-Financial Creditor in

Class. The existence of debt due to a creditor in a class can be established

through an agreement for sale, letter of allotment, receipt of payment made, or

any other document evidencing the existence of a debt and in the present case

the Respondents No. 2 and 3 have clearly established the same as has been

noted by the Adjudicating Authority in the tabular chart at page 120 of the

impugned order. In all fairness, the Ld. Counsel for Appellant while making his

submissions submitted that the Appellant would not like to press the point made

by them earlier that the claims of the Respondents were unsupported by

financial statements/books of the Corporate Debtor. As along as an allottee pays

consideration and puts in money for purchase of units, this will have the effect

of commercial borrowing and consequently such unit purchaser is clearly

entitled to be treated as Financial Creditor in terms of Section 5(8)(f) of the IBC

which would entitle him to make a "claim" in terms of Section 3(6) of the IBC.

Seen from this perspective, we are of the considered view that the Adjudicating

Authority has not committed any error in holding that it did not find any

impediment in holding the Respondents No.2 and 3 to be allottees who were

entitled to file their claims.

Page 14 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025

15. On the contention of the Appellant that viewed from the prism of RERA

Act, the Respondents No.2 and 3 cannot be viewed as allottees but have to be

treated as promoters, we are of the considered view that the Appellant has tried

to unnecessarily transpose the provisions of the RERA Act to the IBC framework

particularly when the legislature has consciously limited the applicability of

RERA Act specifically in respect of the definition of the terms 'allottee' and 'real

estate project' as inserted in Explanation (ii) to Section 5(8) by the IBC (Second

Amendment) Act, 2018. This limited adoption of RERA Act is evident from the

text of Section 5(8)(f) read with the explanation therein, which defines financial

debt in the context of real estate transactions. The deliberate inclusion of only

these two definitions- 'allottee' and 'real estate project'- implies a conscious

legislative intent not to import any other definition from RERA, such as

'promoter' or 'agent'. On the contrary, the Appellant has tried to import the

definition of the term 'promoter' also from the RERA Act, 2018 which cannot be

countenanced since the IBC is self-contained Code and in the absence of express

provision made therein, we cannot accept the stand-point of the Appellant to

transpose other provisions of the RERA Act on the IBC. We cannot be oblivious

of the fact that the role and rights of various stakeholders under RERA are

distinct as it serves a different regulatory purpose whereas in the given factual

matrix, we are concerned solely with admission of claims by RP in terms of

Section 3(6) of IBC and in determining the existence of financial debt in terms of

Section 5(8) of the IBC. We therefore do not find any infirmity on the part of the

Adjudicating Authority to have upheld the decision of the RP to have admitted

Page 15 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 the claims of the Respondents No.2 and 3 after treating them as allottees and

making them a part of the CoC.

16. The Appellant in their pleadings also raised the plea that the RP had acted

in violation of law by admitting the claims of the Respondents No.2 and 3 as

Financial Creditors in the CoC inspite of having been declared dissolved entities

and struck off from the ROC. Assertion was made that in the absence of

revival/restoration of the Company under Section 252 of the Companies Act, the

Respondents No.2 and 3 could not have maintained and enforced any claim in

the CIRP of the Corporate Debtor. This plea of the Appellant was held to be

devoid of merit by Respondent No.2 and 3 as well as the RP. It was contended

that in terms of Section 250 of the Companies Act, 2013, even when a company

is struck off the register of companies, it continues to exist for the purpose of

realizing amounts due to the company and for the payment or discharge of its

liabilities or obligations. Hence, even if Respondents No.2 and 3 were struck off

from the register of ROC, that does not preclude them from asserting their rights

as creditors or from participating in the CIRP as their claims were otherwise valid

and legally admissible.

17. We find substance in the above contention made by Respondents No.2 and

3. The law as it stands today does not prohibit admission of any claim filed by

companies struck off from the register of companies, the Adjudicating Authority

has not erred in holding that there was nothing wrong on the part of the RP to

admit the claims of Respondents No.2 and 3. We also find that the Adjudicating

Authority has relied on the judgement of the High Court of Delhi in the matter

of A.B. Creations and Anr. Vs Bhan Textiles Pvt. Ltd., (2024) ibclw.in 1155 Page 16 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 HC in holding that even if a company is dissolved under Section 248 of the

Companies Act, there is no bar on them for pursuing their legal remedies from

realizing the amount due to the company, whether crystallised or not, as much

as they are liable to be subjected for the payment or discharge of the liabilities

or obligations of the company arising from any contract or statutory

implications. We are of the considered view that the provisions of the Companies

Act has been wrongly relied upon by the Appellant to deny the claims of

Respondents No.2 and 3 and make this a ground to seek their exclusion from

the CoC.

18. This brings us to the contention of the Appellant that Respondents No.2

and 3 are speculative investors and co-developers who were interested only in

the profit of the project and were not homebuyers/allottees. It is the case of the

Appellant that in order to be a genuine allottee, the homebuyer must be a

purchaser of a specific unit with clear intention to take possession of such a

unit. In support of their contention, the Appellant has relied on the judgment of

the Hon'ble Apex Court in Pioneer Urban Land and Infrastructure Ltd. Vs

UOI (2019) IBClaw.in 13SC which held that speculative investors seeking

profit through resale rather than possession are not allottees and that in the

present case since both the Respondents failed to establish that specific units

had been allotted to them which they had taken possession of, it reinforces that

they were mere speculative investors.

19. We find that the Adjudicating Authority has also considered this

contention of the Appellant as to whether the claim of the Respondents can be

rejected on the grounds of holding them to be speculative investors. In doing so, Page 17 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 the Adjudicating Authority has relied on the judgement of this Tribunal in

Everlike Real Estate judgment supra which has also kept in mind the Pioneer

Urban Land and Infrastructure judgment supra to hold that IBC does not

discriminate between a homebuyer who purchases a unit for self-use or

purchases multiple units for commercial purposes. The relevant excerpts of the

judgement are as reproduced below:

"47. The word 'allottee' as contained in explanation 1 of Section 5(8)(f) of the Code is by nature is quite exhaustive and illustrative and may include Homebuyer or unit owner or any commercial property owner.

48. The Code or the RERA Act, 2016 do not differentiate anywhere between the Homebuyers who purchase units for his own consumption or the Homebuyers or unit purchaser who purchase the multiple units for commercial purposes.

49. The Hon'ble Supreme Court of India in Pioneer Urban Land (2019) ibclaw.in 13 SC held that the allottee, who has given advance or paid money to the Real Estate Developers is a Financial Creditor. The issue regarding the genuine Homebuyers v/s Speculative Homebuyers is relevant only at the stage for the admission of CIRP under Section 7 of the Code. Thus, it becomes clear that the Hon'ble Supreme Court of India held the position of speculative investors only for seeking unnecessary insolvency of the Corporate Debtor. The Hon'ble Supreme Court held that any allottee who paid for purchasing units will be treated as having effect of commercial borrowing and consequently such unit purchaser will be treated as Financial Creditors.

50. Thus, it becomes clear that whether the homebuyer/ allottee is genuine homebuyer or genuine allottee or speculative homebuyers/allottee but if he has paid the money for acquisition of such properties or given the advance, such allottee/ homebuyer shall be treated as Financial Creditor in terms of Section 5(8)(f) of the Code. Hence, the pleadings of the Respondent No. 2 in this regard that the Appellant is speculative investor will not affect the rights of the Appellant to be treated as the Financial Creditors."

20. When we look at the ratio of the above judgment, we find that the same is

squarely applicable in the present case and the claims of Respondents No.2 and

3 could not have been extinguished merely because of being a speculative

Page 18 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 investor. Thus, judgement clearly holds that even if an allottee falls under the

category of speculative investor, as has been claimed by the Appellant, the bar

on such a speculative investor allottee is only for initiation of CIRP and not for

purposes of filing their claim as creditor in class. Furthermore, Section 15 of the

RERA Act expressly contemplates that a single allottee may book multiple

apartments or plots in a project, and there is no restriction on third-party sales

or multiple bookings by the same entity. The mere fact of multiple allotments

does not alter the status of the Respondents as allottees and hence the RP did

not commit any error in admitting the claims of the Respondents as allottees

and in assigning them a berth in the CoC.

21. This brings us to the submission made by the Appellant that as per the

books of accounts of Respondent No.2 an amount of Rs. 9.965 Cr. had been

purportedly paid for the sale and transfer of certain properties, while the

Corporate Debtor had transferred properties worth 15.37 Cr. to the Respondent

No.2 and to other persons on its behalf. As such no amount was therefore

recoverable by Respondent No.2. Instead, it was Respondent No.2 who owed

money to the Corporate Debtor. It was also added that similarly in the case of

Respondent No.3-Mohali Builders, a claim of Rs 7.78 Cr. was accepted by the

RP whereas the books of account showed only a receipt of Rs 3.80 Cr. This clearly

shows that the RP had acted in a non-transparent manner in admitting non-

existent claims of Respondents No.2 and 3. It was contended that the RP had

admitted claims without proper claim collation or verification. The claims filed

by Respondents No.2 and 3 were in excess of the amount recorded in the books

of account. Moreover, the claims were based on unaccounted cash receipts Page 19 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025 issued by the management prior to the taking over by the suspended directors.

The acceptance of unaccounted cash transactions as claims of Respondent No.2

by the RP without proper verification and reconciliation demonstrates a

deliberate design on the part of RP to unfairly help the Respondents No.2 and 3

to secure their entry into the CoC and establish control the decision-making

process of the CoC. It was further contended that even if it was admitted that

money had been disbursed by the Respondents No.2 & 3 to the Corporate

Debtor, the disbursement did not have the character of time value for money

and hence cannot be treated as a financial debt and in support of their

contention, reliance has been placed on the judgment of this Tribunal in Sugan

Choudhary Vs Arun Enterprises in CA(AT)(Ins) No. 746 of 2022.

22. Countering the contention of the Appellant, it was submitted by the

Respondent No.2 and 3 that the liability to pay the debt owed to Respondent

Nos. 2 and 3 had been admitted by the Corporate Debtor in their own reply in

the Company Petition No. 210/Chd/Chd/2020 filed by various homebuyers. It

was also asserted that the contention that the amounts claimed by the

Respondents No.2 and 3 did not exist in the financial record and balance sheet

of the Corporate Debtor does not carry sufficient basis since in terms of

Regulation 8A of the CIRP Regulations, the existence of debt which due to a

creditor in class could also be proved on the basis of Agreement for Sale, Letter

of Allotment etc. and hence balance sheets cannot be relied upon to be the sole

criteria for admission of claims. Hence, it was asserted that there was no

discrepancy in the admission of claims of Respondents No.2 and 3.

Page 20 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025

23. When we look at the impugned order, we notice that the Adjudicating

Authority after noticing CIRP Regulation 8A of CIRP Regulations also took the

view that creditors in class are entitled to submit their claims basis certain

specified documents other than audited balance sheets. The Adjudicating

Authority has rightly noticed the relevant CIRP Regulations while returning its

findings. We do not find any error in this finding returned by the Adjudicating

Authority since non-reflection of claim amount in the balance sheet cannot be a

cogent ground for rejection of the claim. In such circumstances, the relief sought

by the Appellant for exclusion of Respondents No.2 and 3 from the CoC is devoid

of merit. Furthermore, the judgment in Sugan Choudhary supra relied upon

by the Appellant is inapplicable as it pertained to a private Agreement to Sell

having no connection to a real estate project or rights of an allottee under the

IBC. It neither involved CIRP nor dealt with claims by homebuyers as financial

creditors. Hence, the reliance placed on it is misplaced.

24. During the oral submissions made in the course of the hearing, the Ld.

Counsel for the Appellant informed that it does not wish to press their contention

of Respondents No.2 and 3 being related parties of the Corporate Debtor at the

time of initiation of CIRP. Hence, we do not propose to dilate on this issue any

further when the Appellant does not wish to pursue this limb of argument.

25. In sum, we are of the considered view that the Appellant has failed to

produce cogent grounds and proof to substantiate the exclusion of Respondent

No. 2 and 3 from the CoC on the grounds if having filed inadmissible claims.

Page 21 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025

26. Given the above backdrop, we are of the considered view that the

impugned order of the Adjudicating Authority rejecting the IA No 2105 of 2023

filed by the Appellant cannot be said to be beyond the jurisdiction of the

Adjudicating Authority. We do not find sufficient basis made out by the Appellant

to interfere with the order of the Adjudicating Authority in exercise of our

appellate jurisdiction. Having noticed the sequence of events and the protracted

nature of litigation, we are constrained to add that we do not countenance the

conduct of the Appellant, being suspended management of the Corporate

Debtor, in making repeated forays at litigation by rehashing the same issues

before different fora of law and hence while dismissing the Appeal, we also

impose costs on the Appellant of Rs 5 lakhs to be paid to the Prime Minister's

Relief Fund within 15 days from the date of this order for putting unnecessary

roadblocks and causing delay in the consideration of the resolution plan by the

Adjudicating Authority. All other IAs are also disposed of with the above

directions.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) Place: New Delhi Date: 10.03.2026 Abdul

Page 22 of 22 Company Appeal (AT) (Insolvency) No. 1330 of 2025