The National Company Law Appellate Tribunal, New Delhi, ...

Tribunal Clarifies Section 7 Application Thresholds for Real Estate Projects; Counts Allottees, Not Creditors.

June 4, 2024

Case Laws     Insolvency and Bankruptcy     AT

The National Company Law Appellate Tribunal, New Delhi, addressed the maintainability of a section 7 application concerning a real estate project with IT/ITES offices, residential units, and commercial spaces. The tribunal clarified that the number of allottees, not financial creditors, determines the threshold under Section 7. It emphasized that independent allotments to family members count as separate allottees. The tribunal also noted that no valid possession or occupancy certificates were issued, rejecting arguments to delete certain applicants. The Adjudicating Authority correctly admitted the section 7 application, including those claiming assured returns. The appeal was dismissed, with a directive to exclude a specific period from the Corporate Insolvency Resolution Process.

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