NCLT Orders Homebuyer to Refund ₹1 Cr Recovered Under RERA, Restricts Claim to ₹68.25 Lakh Amidst Developer’s CIRP [Read Order]

In a recent ruling, the National Company Law Tribunal (NCLT) Allahabad Bench has directed a homebuyer to return ₹1 crore previously recovered through Uttar Pradesh Real Estate Regulatory Authority (UP RERA) proceedings after noting that the developer was undergoing Corporate Insolvency Resolution Process (CIRP). The Tribunal also restricted the admitted claim to ₹68.25 lakh.

The applicant, Renaissance Realty, had booked Unit No. KLP0082402 in the Jaypee Kalypso project and paid over ₹4.84 crore to Jaiprakash Associates Ltd (JAL), the corporate debtor. As possession was not delivered within the promised 36 months, the homebuyer approached UP RERA, which in October 2020 ordered JAL to hand over possession and pay delay interest at MCLR + 1%.

A recovery certificate for ₹2.35 crore was issued, and ₹1 crore was recovered and transferred to the applicant. However, JAL challenged the disbursal and filed an appeal before Uttar Pradesh Real Estate Appellate Tribunal (UP REAT), which remained defective due to non-compliance with Section 43(5) of the RERA Act. In June 2024, JAL entered the Corporate Insolvency Resolution Process (CIRP), and Renaissance Realty filed a claim of ₹8.57 crore, which was admitted only to the extent of ₹68.25 lakh.

The applicant argued that despite paying the demanded ₹46.81 lakh in October 2024, possession and sub-lease execution were withheld. They contended that other homebuyers were receiving possession, and the denial was unjust. The applicant also asserted that the ₹1 crore recovery was lawfully received before CIRP began and should not be clawed back.

On the other hand, the respondent stated that possession had been offered in September 2022, but the applicant failed to complete pre-possession formalities. The RP alleged that the ₹1 crore was fraudulently obtained post-CIRP and should be returned to the insolvency estate. They maintained that the applicant’s claim was admitted only partially and that retention of the ₹1 crore would amount to preferential treatment.

After hearing both sides, the Tribunal noted that possession had since been handed over following its interim order dated 16.12.2025, which directed the applicant to deposit ₹1 crore with the registry. With possession no longer in dispute, the Tribunal focused on the fate of the deposit.

The tribunal noted that allowing the applicant to retain the ₹1 crore would violate the collective resolution mechanism under the IBC. The Tribunal ordered the refund of the deposit, with interest, to the RP for inclusion in the insolvency estate. It also affirmed that the applicant’s admitted claim of ₹68.25 lakh would be treated as per the approved resolution plan.

The bench of Praveen Gupta (Judicial member), Ashish Verma (Technical member), observed that “Permitting the Applicant to appropriate or retain the amount of ₹1 Crore would result in preferential recovery by one allottee in disregard of the collective insolvency mechanism contemplated under the Code,” .

Accordingly, the application was disposed of

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