The National Company Law Appellate Tribunal has reaffirmed that insolvency proceedings initiated by homebuyers against real estate developers must be restricted to the specific project in default, ruling that such actions cannot extend to other unrelated projects of the same corporate entity.
The appellate tribunal delivered the ruling while deciding an appeal filed by Navin M Raheja, concerning insolvency proceedings against Raheja Developers Ltd. The bench clarified that when homebuyers, acting as financial creditors, file an application under Section 7 of the Insolvency and Bankruptcy Code due to default in a particular project, the corporate insolvency resolution process (CIRP)…