NCLT Says an IBC Resolution Plan Can Override an Individual RERA Refund Claim: What Homebuyers Should Know

NCLT Mumbai says an individual RERA refund claim cannot be carved out when it conflicts with an approved IBC resolution plan. What buyers in stalled projects should check.

Published 2026-09-15T13:42:00.000Z

NCLT Says an IBC Resolution Plan Can Override an Individual RERA Refund Claim: What Homebuyers Should Know

The quick answer

If a real-estate developer enters the Insolvency and Bankruptcy Code process, an individual homebuyer may not be able to insist on a separate RERA refund when that remedy conflicts with the resolution plan approved through the collective insolvency process. In a 9 September 2026 order concerning Spenta Enclave’s Altavista project, the NCLT Mumbai bench rejected four buyers’ attempt to require an exit-and-refund mechanism outside the approved plan.

This is not a ruling that RERA refund rights have disappeared generally. The important trigger is insolvency: once a project is in CIRP and a resolution plan governs admitted claims, the IBC framework can change how an individual buyer’s remedy is treated.

Key facts

The order was passed by the Mumbai bench of the National Company Law Tribunal on 9 September 2026.
Four Altavista homebuyers sought refund/exit treatment after their claims had been admitted in the corporate insolvency resolution process.
The homebuyer class held 22.66% of the Committee of Creditors voting share; the four applicants together represented about 0.22%.
The tribunal said individual members of the homebuyer class are bound by the collective decision taken through the authorised representative under the IBC framework.
Section 238 of the IBC gives the Code overriding effect where its provisions are inconsistent with another enactment.
The tribunal also said a successful resolution applicant taking over the project cannot automatically be treated as bound by every contractual obligation of the original developer.

What happened?

The buyers had booked homes in Spenta Enclave’s Altavista project and sought refunds after possession was not delivered as expected. Their claims were admitted in CIRP, but they argued that their Section 18 RERA refund rights should be protected separately in the resolution plan. The NCLT rejected that approach, holding that their treatment was governed by the resolution plan and that the tribunal could not rewrite the commercial terms merely to provide an individualised remedy outside the insolvency process.

Fact versus interpretation

Fact	What not to infer
The NCLT rejected these buyers’ separate refund demand where it conflicted with the IBC plan.	It does not mean every delayed-project buyer has lost Section 18 RERA remedies.
Homebuyers are financial creditors and participate as a class in CIRP.	It does not mean an individual buyer’s circumstances are irrelevant before insolvency begins.
IBC can prevail where there is an inconsistency with another law.	It does not make RERA irrelevant to every project undergoing financial stress.
A new developer is not automatically bound by every old contractual term.	It does not mean the successful applicant has no obligations; the approved resolution plan and applicable law remain critical.

Who is affected?

The ruling is most relevant to buyers in projects where the developer has formally entered CIRP, buyer claims have been admitted and a resolution plan is being considered or has been approved. Buyers in an ordinary delayed-possession dispute outside insolvency should not assume this order removes their usual RERA remedies.

Why this matters before taking a home loan

Property due diligence is not only about title and approvals. Construction progress, developer finances and project-level litigation can affect whether a buyer ultimately receives the home on the expected timetable. A home loan can continue to create repayment obligations even when the underlying project becomes distressed, depending on the loan documents and disbursement structure.

That is why buyers should avoid treating lender approval as a substitute for independent project due diligence. A bank’s willingness to finance a unit does not guarantee completion, possession timing or a future refund.

Checklist for buyers in a distressed project

Confirm whether the developer has formally entered CIRP; rumours of financial stress are not the same thing.
Obtain the insolvency case number, resolution-professional notices and the status of your submitted claim.
Check whether your claim amount and classification have been admitted correctly.
Understand how the homebuyer class will vote and who the authorised representative is.
Read the proposed resolution plan’s treatment of possession, balance consideration, timelines and refund/exit requests.
Keep RERA orders, allotment agreements, payment receipts and lender disbursement records together.
Ask your lender in writing how project insolvency affects future disbursements and your contractual EMI/pre-EMI obligations.
Take case-specific insolvency/RERA advice before withdrawing a claim, signing a settlement or stopping loan payments.

What should existing borrowers do?

Do not stop EMI or pre-EMI payments solely because the developer has entered insolvency. The loan agreement is a separate contract between borrower and lender. If construction has stalled, contact the lender early, document the project status and ask whether undisbursed tranches can or should be held subject to contractual and legal requirements.

What to watch next

Buyers should watch for any appellate challenge to the order and, more importantly, the exact terms and implementation of the resolution plan for their own project. Insolvency outcomes are plan-specific. A headline about IBC prevailing over an individual remedy cannot tell a buyer what possession date, payment obligation or recovery they will receive in another project.

FAQ

Does IBC always cancel a homebuyer’s RERA refund right?

No. The order concerns a conflict between an individual refund demand and the collective insolvency/resolution-plan framework. Outside CIRP, ordinary RERA rights are a different question.

Can I opt out if most homebuyers support a resolution plan?

Do not assume there is an automatic individual opt-out. Homebuyers participate as a creditor class under the IBC, and the treatment of dissenting or individual buyers depends on the Code, the approved plan and the facts.

Does a new developer have to honour every promise made by the old developer?

The NCLT said a successful resolution applicant cannot automatically be treated as bound by every old contractual term. The approved resolution plan is central to determining the incoming developer’s obligations.

Does my home loan stop if the project enters insolvency?

Not automatically. Your loan contract remains separate. Ask the lender about future disbursements and repayment obligations, and obtain professional advice for your specific case.

RiteAssetz takeaway: before buying in an under-construction project, assess project and developer risk alongside the interest rate and EMI. If a project is already in distress, understand the insolvency claim and resolution-plan position before making a new financial commitment.