NCLT Mumbai Rejects Homebuyer Claims in E-Commerce Magnum CIRP

Background

The Mumbai Bench-II of the National Company Law Tribunal has dismissed a batch of six interlocutory applications filed by multiple applicants seeking recognition as financial creditors or homebuyers in the corporate insolvency resolution process (CIRP) of E Commerce Magnum Solution Limited. The applications were moved under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, against the Resolution Professional, Pankaj Ramandas Majithia, seeking directions for admission of claims and a stay on Committee of Creditors (CoC) meetings and voting on any resolution plan. The applicants relied on an allotment letter dated 7 April 2019, claiming allotment of multiple residential apartments in a proposed project titled “Marquis”, and contended that an amount of ₹48 lakh each had been paid on their behalf by a third party. They argued that the Resolution Professional exceeded his jurisdiction by refusing to admit their claims and by scrutinising the underlying transactions.

No Disbursement, No Financial Debt

Rejecting the plea, the NCLT held that the applicants failed to establish the existence of a “financial debt” under Section 5(8) of the IBC. The Tribunal noted that it was an admitted position that no amount was disbursed by the applicants themselves to the corporate debtor, and the alleged payments were made by a third party without any assignment, agency, or authorisation document. In the absence of disbursement by the claimants, the essential ingredient of financial debt was held to be missing.

The Bench further held that the applicants could not be treated as homebuyers. Relying on Pioneer Urban Land and Infrastructure Ltd. v. Union of India and Phoenix ARC Pvt. Ltd. v. Spade Financial Services Ltd., the Tribunal observed that homebuyer status under the IBC is premised on actual financing of the project. The allotment letter merely reflected an investment arrangement in a proposed, unregistered project, with no RERA registration or agreement for sale. Accordingly, all six applications were dismissed as devoid of merit.