In the case of Harpal Singh Chawla vs. Vivek Khanna and Ors., the National Company Law Appellate Tribunal (NCLAT) New Delhi addressed the issue of claims by unit holders in insolvency proceedings.
Brief Facts
- Initiation of CIRP: The Corporate Insolvency Resolution Process (CIRP) was initiated against Spaze Towers Pvt. Ltd., the Corporate Debtor, upon the application of certain financial creditors.
- Claims by Unit Holders: During the CIRP, several unit holders, who had been allotted units by the Corporate Debtor, submitted claims as financial creditors.
- Possession and Conveyance Deed: It was noted that some of these unit holders had already been handed over possession of their respective units, and conveyance deeds had been executed in their favour.
Judgment
The NCLAT held that
- No Surviving Claim: Once a unit holder has been handed over possession and a conveyance deed has been executed, no claim survives for such unit holders in the CIRP.
- Role of Resolution Professional (RP): The admissibility of any claim filed by a financial creditor, including those in a class, must first be examined by the Resolution Professional. The RP is responsible for the collation and verification of claims as per the statutory regulations governing the process.
This judgment underscores the principle that unit holders who have received possession and legal title to their units cannot assert further claims in the insolvency proceedings of the developer. It also emphasizes the critical role of the Resolution Professional in assessing the validity of claims submitted during the CIRP.