According to Taxscan, the National Company Law Tribunal (NCLT), New Delhi Bench has held that the pendency of proceedings before the Real Estate Regulatory Authority (RERA) and delays allegedly caused by lack of external infrastructure cannot be used as a defence to defeat an insolvency petition filed by allottees under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Bench admitted a petition filed by 176 homebuyers seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the developer of a residential project after finding the existence of financial debt and default arising from prolonged non-delivery of possession.
The homebuyers submitted that despite paying substantial consideration for their units, possession had not been delivered even after the expiry of the timelines stipulated in the Agreements to Sell, and argued that the developer had failed to honour settlement commitments and directions issued by regulatory authorities. Opposing the petition, the corporate debtor contended that the delay was attributable to factors beyond its control, including the absence of external infrastructure such as roads, sewerage systems, electricity connections and governmental approvals, and argued that multiple proceedings concerning the project were pending before the Haryana Real Estate Regulatory Authority (HRERA) and other forums, rendering the insolvency petition unsustainable.
The Tribunal rejected the developer's contentions, observing that the obligation to complete the project and hand over possession flowed directly from the contractual commitments undertaken by the developer. It held that homebuyers who had invested their savings could not be compelled to wait indefinitely merely because external development works remained incomplete. The Bench, comprising Anupinder Singh Grewal (President) and Ravindra Chaturvedi (Technical Member), held that pending proceedings before HRERA and other forums do not create a legal bar to initiation of CIRP, and it admitted the Section 7 application, ordering commencement of a project-specific CIRP.
The case, Surinder Aggarwal & Ors vs M/s Raheja Developers Limited, was decided on 8 June 2026 and carries the citation 2026 TAXSCAN (NCLT) 189, with case number CP (IB) 182(ND)/2024. Counsel for the petitioners was Sumesh Dhawan, Advocate, while the respondent was represented by P. Nagesh, Senior Advocate.