India's National Company Law Appellate Tribunal confines insolvency to defaulted real estate projects
Resolution professionals must accept claims only for the defaulted project
Change
India's National Company Law Appellate Tribunal ordered that Corporate Insolvency Resolution Process (CIRP) proceedings be confined to the single defaulted project and directed the resolution professional to issue a corrigendum asking stakeholders in the Krishna Housing Scheme to submit claims within 14 days under CIRP Regulations, 2016.
Why it matters
Project-level aggregation of claims and use of assets from unrelated projects is now barred. Insolvency cases and claim admission must be assessed and processed on a per-project basis, not at the corporate-group level.
Implications
- — Resolution professionals managing Corporate Insolvency Resolution Process (CIRP) for real estate projects — must publish the corrigendum and restrict claim intake to stakeholders tied to the defaulted project immediately — failing to do so risks non-compliance with the appellate order and procedural challenge to the CIRP.
- — Flat-buyer groups and other creditors who filed Section 7 applications under India's Insolvency and Bankruptcy Code (IBC) — must file or refile claims limited to the named project within the 14-day window specified by the corrigendum — claims submitted for unrelated projects will not be admitted into the confined CIRP.
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