The National Company Law Tribunal (NCLT), Mumbai Bench, has held that individual homebuyers cannot insist on a separate refund under Section 18 of the Real Estate (Regulation and Development) Act, 2016 (RERA) when such relief conflicts with an insolvency resolution plan approved under the Insolvency and Bankruptcy Code, 2016 (IBC).
The ruling was delivered on September 9, 2026, in proceedings concerning Spenta Enclave Pvt. Ltd. and its Altavista project. The Tribunal also held that a successful resolution applicant taking over a distressed real estate project cannot automatically be treated as bound by every contractual obligation entered into between the original promoter and individual homebuyers.
The decision is significant for homebuyers because it highlights the difference between individual remedies available under RERA and the collective insolvency process under the IBC.
Background of the Spenta Enclave case
The proceedings arose from the insolvency of Spenta Enclave Pvt. Ltd., the developer of the Altavista project in Chembur, Mumbai.
The company was admitted into the Corporate Insolvency Resolution Process (CIRP) in March 2023. Four homebuyers approached the NCLT seeking relief after possession of their flats was not delivered as originally expected.
The applicants argued that they had rights under Section 18 of RERA, including the right to seek a refund because of the failure to provide possession.
Their claims had been admitted in the insolvency proceedings. However, the Committee of Creditors (CoC) approved a resolution plan that did not provide the individual refund mechanism sought by these homebuyers.
Homebuyers sought individual refund
The four applicants wanted their individual right to exit the project and obtain a refund to be recognised despite the resolution plan.
Their argument was essentially that their statutory rights under RERA should continue independently and that the new developer taking over the project should honour the contractual and statutory obligations of the original promoter.
The Tribunal did not accept this approach.
It held that once the project enters the insolvency resolution process, claims of homebuyers have to be dealt with within the collective framework created by the IBC.
Homebuyers are financial creditors under IBC
One of the important aspects of the case is the position of homebuyers under the insolvency law.
Homebuyers were given the status of financial creditors under the IBC in 2018. This enables them to participate in the insolvency process through an authorised representative and have a collective voting share in the CoC.
In the Spenta Enclave case, the homebuyers as a class held approximately 22.66% voting share in the CoC. The four applicants together represented only about 0.22% of the voting share.
The homebuyers’ class voted in favour of the resolution plan through its authorised representative.
The Tribunal therefore treated the approved resolution plan as binding on individual members of that class.
Majority decision binds individual homebuyers
The NCLT emphasised the collective nature of the insolvency process.
According to the Tribunal, an individual homebuyer cannot seek a separate remedy outside the resolution plan merely because the individual buyer’s circumstances or contractual rights differ from those of the majority.
The Tribunal observed that the insolvency process involves the collective resolution of claims and balancing of stakeholder interests.
It therefore rejected the contention that the resolution plan was required to separately incorporate the applicants’ refund rights under Section 18 of RERA.
This means that where a resolution plan has been approved through the statutory insolvency process, an individual homebuyer may not be able to insist upon a separate RERA refund if that remedy is inconsistent with the approved plan.
What about Section 18 of RERA?
Section 18 of RERA ordinarily provides important protection to an allottee when a promoter fails to give possession in accordance with the agreed terms.
Depending on the circumstances, an allottee may seek to withdraw from the project and obtain refund with interest, or continue with the project and claim interest for the period of delay.
However, the NCLT ruling demonstrates that the operation of this right can become subject to the insolvency framework when the promoter itself enters CIRP.
The Tribunal stated that the IBC and RERA operate in different spheres, with the IBC dealing with the collective resolution and rehabilitation of a corporate debtor, while RERA provides protections to individual real estate allottees.
Therefore, the existence of a remedy under RERA does not necessarily mean that an individual buyer can exercise that remedy independently of an insolvency resolution plan.
Section 238 of IBC becomes important
A crucial legal provision considered by the Tribunal was Section 238 of the IBC.
Section 238 gives the IBC an overriding effect in case of inconsistency with another law.
The Tribunal observed:
“By virtue of Section 238 of the Code, the provisions of the Code prevail in case of any inconsistency with other enactments.”
Accordingly, where an individual refund claim under RERA conflicts with the treatment of claims under an approved resolution plan, the insolvency framework assumes importance.
This does not mean that RERA becomes irrelevant whenever a developer enters insolvency. Rather, the ruling illustrates that the manner in which a homebuyer’s claim is dealt with may be determined by the IBC process and the approved resolution plan.
Can a new developer be forced to honour every old contractual term?
The Tribunal also dealt with another important issue concerning a successful resolution applicant (SRA).
The homebuyers argued that the new developer should be bound by the contractual terms agreed between them and the original promoter.
The NCLT did not accept that the new developer could automatically be treated as having assumed every contractual obligation of the erstwhile promoter.
The Tribunal held that the successful resolution applicant could not simply be regarded as having stepped into the shoes of the original promoter for all purposes and therefore could not automatically be bound by all the earlier contractual terms.
This distinction is important in real estate insolvency because the purpose of the resolution process is generally to revive the project and resolve the corporate debtor’s financial distress, rather than merely reproduce all liabilities of the previous promoter against the incoming resolution applicant.
Protection for the incoming resolution applicant
The Tribunal also noted that the successful resolution applicant was not a party to the application filed by the four homebuyers.
Consequently, the Tribunal was cautious about granting relief that could adversely affect the interests of the incoming developer without giving it an opportunity to be heard.
The principle has wider significance for stalled real estate projects where a new developer or consortium is brought in through the insolvency process.
An incoming developer needs clarity about the liabilities, claims and obligations that it will inherit under the approved resolution plan.
What happened to the Altavista project?
The NCLT’s September 9 order also approved a ₹1,048.95-crore resolution plan for Spenta Enclave.
The approved plan is intended to complete the stalled project, with approximately 300 homebuyers expected to receive their flats. The admitted claims of these homebuyers were reported at approximately ₹264.29 crore.
The plan provides for completion of the pending phases and delivery of flats after payment of the applicable balance sale consideration.
Importantly, the reported terms provide that no additional amount is to be charged from homebuyers, while possession timelines are revised in accordance with the applicable RERA extension.
The resolution plan was approved by the CoC with a 92.87% voting share.
What does the ruling mean for homebuyers?
The decision highlights an important distinction between RERA proceedings and insolvency proceedings.
A homebuyer dealing with an ordinary delayed-possession dispute may have remedies under Section 18 of RERA. However, if the developer enters CIRP and a resolution plan is subsequently approved, the buyer’s claim has to be considered in the context of the IBC’s collective resolution mechanism.
An individual buyer cannot necessarily insist that his or her preferred remedy—such as immediate refund with interest—be carved out of the resolution plan.
The majority decision of the homebuyers’ class and the terms of the approved resolution plan can therefore become decisive.
What should homebuyers check when a project enters insolvency?
Homebuyers involved in an insolvent real estate project should carefully examine:
- Whether the developer has entered CIRP
- Whether their claim has been admitted by the Resolution Professional
- The voting share of homebuyers as a class
- The manner in which the Authorised Representative represents homebuyers
- The proposed resolution plan
- Treatment of refund, possession, interest and compensation claims
- Revised possession timelines
- Obligations of the successful resolution applicant
- Any RERA orders already passed against the original promoter
- Whether those orders or claims are specifically dealt with in the resolution plan
Homebuyers should also distinguish between an admitted claim in insolvency and an independent right to obtain a particular form of relief. Admission of a claim does not necessarily mean that every remedy originally available against the promoter will continue unchanged against the successful resolution applicant.
RERA rights and IBC resolution: the key takeaway
The NCLT Mumbai ruling does not simply eliminate homebuyers’ rights under RERA. Instead, it highlights how those rights can be affected when the developer enters the IBC insolvency framework.
The central takeaway is that an individual homebuyer’s RERA refund claim cannot necessarily override a resolution plan approved through the collective insolvency process.
At the same time, the decision underscores the importance of the homebuyers’ collective vote, because homebuyers participate in insolvency proceedings as a class of financial creditors.
For purchasers in stalled projects, therefore, the question is no longer only whether Section 18 of RERA provides a refund right. It is also necessary to examine whether the project is undergoing CIRP, how the homebuyers’ claims are treated in the resolution plan, and what obligations have been accepted by the successful resolution applicant.
The Spenta Enclave proceedings demonstrate how these issues can become particularly important when the objective shifts from pursuing an individual refund to reviving the project and securing possession for the wider group of homebuyers.
Important: The article above is based on the reported September 9, 2026 NCLT Mumbai proceedings and related reporting. The exact effect of the order should be assessed from the full order and the specific terms of the approved resolution plan in an individual case.
