Delay in Possession Not Excused by Lack of Occupation Certificate | NCLAT

Case Details: Mohit Arora vs. Manish Aneja - [2025] 178 taxmann.com 94 (NCLAT- New Delhi)

Judiciary and Counsel Details

• Justice Ashok Bhushan, Chairperson
•  Barun Mitra, Technical Member
• Abhijeet Sinha, Sr Adv., Ishan Dewan, V. Siddharth & Shreyans Jain, Advs. for the Appellant
• Rishabh Jain, Palash S. Singhai, S. Sharma, Ms Riddhi Jain, Nikhil Kumar Jha, Nivesh Dixit, Advs., Ms Pooja M. Saigal and Ms Vibha Makhija, Sr Advs. for the Respondent

Facts of the Case

In the instant case, the corporate debtor was granted a license for the construction and development of an affordable group housing colony. The units were booked, and allotment letters were issued in favour of respondents/allottees.

As per the Flat Buyer’s Agreement, the corporate debtor represented to allottees that possession of units would be handed over in four years from the date of approval of the building plan and the date of environmental clearance, whichever was later.

The Respondents made payments towards consideration and filed an application under Section 7 of the IBC against the corporate debtor, alleging that the corporate debtor had committed a default in not handing over possession of the flats.

The NCLT, by the impugned order, admitted the section 7 application. Thereafter, an appeal was made before the National Company Law Appellate Tribunal (NCLAT)

It was noted that the project was not yet complete, as per the appellant’s own case, and the appellant, in its resolution plan, had indicated that it would take 2-3 years to hand over possession to homebuyers.

Further, since completion of construction was a precondition for obtaining the Occupation Certificate, the corporate debtor could not hide its default on the pretext that, due to the non-receipt of the Occupation Certificate, possession could not be handed over; hence, there was no default on the part of the corporate debtor.

NCLAT Held

The NCLAT held that the submission advanced by counsel for the appellant that there was no default on the part of the corporate debtor could not be accepted. Thus, no case had been made out to interfere with the initiation of the insolvency resolution process of the corporate debtor.

List of Cases Reviewed

List of Cases Referred to

• Ireo Grace Realtech Pvt. Ltd. v. Abhishek Khanna (2021) 2 SCR 1 (para 4)
• Manish Kumar v. Union of India [2021] 123 taxmann.com 343 (SC) (para 14)
• Shailendra Agarwal v. Asit Upadhyaya [2025] 175 taxmann.com 369 (NCLAT- New Delhi) (para 24)
• Gurgaon v. Umang Realtech P. Ltd. 2020 SCC OnLine NCLAT 1199 (para 26)
• Flat Buyers Association of Winter Hills – 77, Gurgaon v. Umang Realtech P. Ltd. [2020] 119 taxmann.com 50 (NCLAT- New Delhi) (para 26)