Summary and Analysis of Amit Nehra & Anr vs Pawan Kumar Garg & Ors 2025 INSC 1086

1. Heading of the Judgment

Amit Nehra & Anr. vs. Pawan Kumar Garg & Ors.
Citation: 2025 INSC 1086
Court: Supreme Court of India
Bench: Hon'ble Mr. Justice Sanjay Kumar and Hon'ble Mr. Justice Satish Chandra Sharma
Date of Judgment: September 09, 2025

2. Related Laws and Statutory Framework

The judgment primarily interprets provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) and the sanctity of an Approved Resolution Plan. The key legal context involves:

• Section 7 of the IBC: Under which the Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor, M/s Puma Realtors Pvt. Ltd.

• IBC Regulations on Claim Submission: The process mandated by the Interim Resolution Professional (IRP) for financial creditors (including homebuyers) to submit their claims within a specified timeline via a public announcement.

• Section 31 of the IBC: Which states that an approved resolution plan is binding on all stakeholders, including corporate debtors and creditors.

• Section 62 of the IBC: Which provides the statutory basis for filing an appeal to the Supreme Court against an order of the National Company Law Appellate Tribunal (NCLAT).

3. Basic Judgment Details

• Parties:
  Appellants: Amit Nehra & Another (homebuyers who had booked an apartment).
  Respondent No. 1: Pawan Kumar Garg (the Resolution Professional).
  Respondent Nos. 2 & 3: One City Infrastructure Pvt. Ltd. and APM Infrastructure Pvt. Ltd. (the Successful Resolution Applicants).

• Core Dispute: The appellants, who had paid over 95% of the apartment's cost (~₹57.56 Lakhs), were denied possession of their apartment. The Resolution Professional and the Successful Resolution Applicant classified them as "belated claimants" under the approved resolution plan, entitling them only to a 50% refund of their principal amount, instead of granting possession of the flat.

• Timeline of Key Events:
  2010: Appellants booked an apartment in the 'IREO Rise (Gardenia)' project in Mohali.
  2011: Executed a buyer's agreement; paid almost the entire consideration.
  2013: Possession was due but not delivered.
  2018: Appellants filed a consumer complaint. The CIRP against the builder began, and the consumer forum dismissed the case, directing them to pursue their claim in the CIRP.
  2019 (Jan): Appellants claimed they physically submitted their claim form (Form-CA) at the builder's Mohali office (a fact hotly disputed by the respondents).
  2019 (Aug): The Committee of Creditors (CoC) approved the resolution plan.
  2020 (Feb): Pursuant to an email from the Resolution Professional seeking resubmission of claims due to incomplete records, the appellants resubmitted their claim via email.
  2020 (Apr): The Resolution Professional published the list of financial creditors, which included the appellants' claim of ₹57.56 Lakhs at Serial No. 636, meaning it was verified and admitted.

• Lower Courts' Decisions: Both the National Company Law Tribunal (NCLT) and the NCLAT rejected the appellants' plea for possession. They held the claim was belated (filed after CoC approval) and thus, under Clause 18.4(xi) of the plan, the appellants were only entitled to a 50% refund.

4. Explanation of the Judgment

Supreme Court's Analysis and Reasoning

The Supreme Court allowed the appeal, setting aside the orders of the NCLAT and NCLT. The Court's reasoning was based on a fundamental principle of justice and a correct interpretation of the resolution plan.

1. Central Question: The core issue was whether the appellants fell under Clause 18.4(vi)(a) of the resolution plan (which entitled them to possession) or under Clause 18.4(xi) (which limited them to a 50% refund).

2. Resolution of Factual Dispute: The Court noted that while the physical submission of the claim in January 2019 was disputed, it did not need to decide on that. The admitted and undisputed fact was that the claim was resubmitted in February 2020, verified by the Resolution Professional, and officially admitted in the list of creditors published in April 2020.

3. Significance of Claim Verification and Admission: The Court held that this verification and admission were crucial. By including the appellants in the list of financial creditors, the Resolution Professional performed a statutory duty. This act granted the claim "full legal recognition within the CIRP process." The Court emphasized that this official list cannot be treated as a meaningless formality.

4. Correct Interpretation of the Resolution Plan Clauses:

• Clause 18.4(vi)(a): This clause governs allottees whose claims have been filed, verified, and admitted by the Resolution Professional. It provides for the handover of the unit or execution of a conveyance deed. The Supreme Court held that the appellants squarely fell under this clause.

• Clause 18.4(xi): This is a residuary clause meant for allottees who have not filed any claim, or whose claim was not verified, or was not communicated to the resolution applicant. The Court found that the respondents' reliance on this clause was "misconceived" because the appellants' claim was verified, admitted, and included in the official list.

5. Protection of Homebuyers' Rights: The judgment reflects a protective approach towards homebuyers. The Court noted that the appellants were "bona fide homebuyers" who had invested their life savings years in advance. To relegate them to a mere refund claimant status after their claim was admitted would "inflict unfair and unwarranted prejudice" and run contrary to the object of the IBC's legislative framework, which aims to maximize value and protect the interests of all stakeholders.

6. Distinguishing Precedent: The Court approved of the reasoning in Puneet Kaur vs. K.V. Developers, which held that claims reflected in the corporate debtor's records must be considered to ensure an equitable and fair resolution process.

The Supreme Court's Final Direction

The Supreme Court allowed the appeal and issued the following directions:

1. The orders of the NCLAT and NCLT were set aside.

2. The Respondents (Successful Resolution Applicants) were directed to execute the Conveyance Deed and hand over physical possession of the apartment to the appellants within two months.

3. The appeal was allowed with no order as to costs.

In-Depth Analysis

This judgment is significant for several reasons:

• Substance Over Form: The Court prioritized the substantive verification and admission of a claim over the technicalities of its submission timeline. This prevents genuine creditors from being excluded on procedural grounds after their debt has been officially recognized.

• Sanctity of the List of Creditors: The ruling reinforces the authority and finality of the list of creditors published by the Resolution Professional. Once a claim is admitted in this list, it becomes a recognized debt that the resolution plan must address appropriately.

• Interpretation of Resolution Plans: The judgment provides clarity on interpreting resolution plans. It mandates a strict and logical reading of the clauses, ensuring that creditors are classified correctly based on the actual status of their claims (verified vs. unverified), not just the timing of their submission.

• Pro-Homebuyer Stance: In the context of real estate insolvencies, this decision strengthens the position of homebuyers who have paid significant sums. It ensures that their rightful claim to the property is honored if their financial contribution is verified, protecting them from being forced into accepting a disadvantageous refund option.

In essence, the Supreme Court ensured that the binding nature of the resolution plan was upheld not by punishing a technical delay, but by enforcing the plan's own terms as they applied to a verified and admitted creditor.