Overview
- A bench of Justices JB Pardiwala and R. Mahadevan held that homebuyers' societies or RWAs have no locus at the admission stage unless they are creditors or statutorily authorised representatives.
- The bench stated that creditors invoking the IBC must seek revival of the corporate debtor rather than using the process as a recovery tool.
- Proceedings at the Section 7 admission stage are limited to determining financial debt and default, with collective homebuyer participation arising only after admission via authorised representatives.
- Upholding CIRP against Takshashila Heights India Pvt Ltd, the Court left intact NCLAT’s reversal of NCLT in a case stemming from about ₹70 crore in loans later assigned to Edelweiss ARC.
- Prospective safeguards were ordered for real estate insolvencies, including full disclosure of all allottees in information memoranda, written reasons from the CoC where possession cannot be handed over, and reasoned grounds for any liquidation recommendation.