NCLAT Closes CIRP in Rare Court-Monitored Insolvency, After Flat Possession Given to Allottees [Read Order]
NCLAT closes CIRP after court-monitored construction ensures flat possession for allottees; holds no Section 12A application required where no unresolved claims remain
NCLAT - CIRP - Taxscan
NCLAT - CIRP - Taxscan
The National Company Law Appellate Tribunal (NCLAT) has formally closed the Corporate Insolvency Resolution Process (CIRP) of Grand Reality Pvt. Ltd., after confirming that the construction of the real estate project was completed and possession handed over to all homebuyers. The case reflects a rare but growing judicial trend where tribunals step in to ensure practical resolution for stakeholders, especially homebuyers, through a “reverse CIRP” model.
The appeal was filed by Satish Chander Verma, a stakeholder in the insolvency proceedings, challenging the continuation of the CIRP despite the project's near-complete resolution.
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The CIRP against Grand Reality Pvt. Ltd. had been initiated under Section 7 of the Insolvency and Bankruptcy Code (IBC) by a group of financial creditors. During the course of proceedings, an intervention application was moved by PAX Homes LLP, the developer of the project, seeking permission to complete the construction.
The NCLAT in an order, allowed the intervention in the larger interest of homebuyers. It directed that the developer be permitted to proceed with the construction under court supervision, a model that has come to be termed as a “court-monitored” or “reverse CIRP”, wherein instead of replacing the promoter, the court oversees the project’s completion in a structured and transparent manner.
Following the NCLAT’s order, the developer resumed work and obtained Occupation Certificates on 10.05.2024 and 22.05.2024. A Local Commissioner was also appointed to verify the status of construction and the claim that units were ready for possession. In her report dated 09.08.2024, the Commissioner confirmed that flats were indeed ready, with only minor fittings pending, which would be installed once buyers paid their final dues.
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The Tribunal, in its later orders, acknowledged these developments and kept the matter pending for final settlement of remaining claims.
While the NCLAT was in trial, the parties also approached the Supreme Court of India, which observed that the appeal had been delayed due to administrative bottlenecks caused by the Resolution Professional (RP). The Apex Court directed the NCLAT to speed up the matter, asserting that construction was complete, and all stakeholders were aligned in favor of closure.
According to an affidavit submitted by the RP in July 2025, all but one of the pending claims had been resolved. Even the Income Tax Department, stated that they had no opposition to closure of the CIRP, provided their claim could be pursued independently post-resolution.
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The Bench comprising Justice Ashok Bhushan (Chairperson), Justice N. Seshasayee (Judicial Member), and Arun Baroka (Technical Member), relying on its past rulings in Sachin Malde v. Hemant Nanji Chheda and Gaurav Bhati v. Smriti Bhatia, reiterated that where claims have been settled and no further creditors exist, CIRP can be closed without requiring a formal Section 12A withdrawal.
The Tribunal noted that there is nothing left in the matter as the construction is complete in pursuance of our order dated 26.09.2023, and possession has been handed over to all the claimant homebuyers.
As a result, the CIRP of Grand Reality Pvt. Ltd. was declared closed, the Resolution Professional was discharged, and all connected applications were disposed of.
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