Emphasising that Section 60(5) does not permit fresh adjudication of pre-CIRP contractual demands already considered by HRERA, the New Delhi Bench of the National Company Law Tribunal (NCLT) has clarified that homebuyers must clear outstanding dues after permissible compensation adjustment to obtain possession and conveyance deeds. The NCLT explained that under Section 60(5) IBC, a dispute must arise out of or relate to the insolvency resolution process. Mere pendency of CIRP does not authorise adjudication of disputes belonging before a competent civil or specialised statutory forum.
The NCLT declined to reconsider disputed builder charges already examined by HRERA, and said that pendency or withdrawal of an appeal against HRERA’s order does not enlarge the Tribunal’s jurisdiction. It pointed out that possession and execution of conveyance deeds require clearance of outstanding dues in accordance with contractual terms and applicable law. Disputed charges cannot be waived or adjusted without a determination by the competent forum.
As the DPC awarded under the same allotment and builder-buyer agreement constitutes mutual dealings connected with the homebuyer’s outstanding dues, the NCLT said that RP must adjust that amount where it has not already been accounted for. Hence, the adjustment is confined to DPC actually awarded by a competent forum. Unadjudicated claims receive no present adjustment, and remedies before the competent forum remain open for claims not finally adjudicated.
Briefly, eleven homebuyers in Spaze Towers Pvt. Ltd.’s “Privvy The Address” project approached the NCLT seeking possession of their apartments and execution of conveyance deeds. They disputed additional demands, including charges for increased super area, EDC/IDC, external electrification, preferential location, club development, labour cess and interest. Five applicants had obtained delayed possession compensation (DPC) orders from HRERA, while the remaining six sought similar relief. The applicants wanted the disputed charges waived or adjusted, together with adjustment of DPC against their outstanding dues. Alternatively, they sought possession on an “as is where is” basis after deducting the estimated completion cost.
The disputes over additional charges had earlier been considered by HRERA, which disposed of the complaints on 25 July 2023. CIRP against the developer commenced on 21 October 2024. The Resolution Professional maintained that he was seeking recovery of pre-existing dues reflected in the developer’s records, rather than imposing fresh liabilities, and opposed reopening the disputes through insolvency proceedings.
The Division Bench comprising Mahendra Khandelwal (Judicial Member) and Atul Chaturvedi (Technical Member) observed that Section 60(5) of the Insolvency and Bankruptcy Code does not give the NCLT unrestricted power to decide every contractual dispute involving a corporate debtor merely because CIRP is pending. The disputed charges required examination of the builder-buyer agreements and the factual basis of the demands, matters falling within the jurisdiction of the competent civil or specialised statutory forum. The NCLT could not sit in appeal over HRERA’s findings, irrespective of whether the appeal against those findings remained pending or was subsequently withdrawn.
The Tribunal further observed that CIRP does not, by itself, extinguish homebuyers’ contractual payment obligations. The RP cannot be required to waive pre-CIRP demands merely because the homebuyers dispute them, or hand over possession without insisting on payment. However, DPC already awarded by a competent forum stands on a different footing because the entitlement has crystallised and arises from the same allotment and builder-buyer agreement as the outstanding dues.
The NCLT clarified that Section 60(5) cannot be used to reopen pre-CIRP contractual or regulatory disputes already considered by HRERA, or to obtain waiver of demands that have not been set aside, reduced or modified by a competent forum. However, finally awarded DPC arising from the same allotment and builder-buyer agreement must be adjusted against the concerned homebuyer’s outstanding dues, provided it has not already been accounted for. This is a limited set-off of an adjudicated entitlement, not a fresh award of compensation or an extension of the compensation period.
