Facts
The Corporate Debtor (CD), M/s. Raheja Developers Ltd., launched an affordable group housing project named "Raheja Krishna Housing Scheme" in Gurugram
Source reference: para 2(ii)-(iii)Under the Builder Buyer Agreement, possession was to be delivered by June 10, 2019
Source reference: para 2(v)Upon default, 130 homebuyers (Financial Creditors in a class) filed a Section 7 application under the IBC
Source reference: para 2(vi)The Adjudicating Authority (NCLT) admitted the CD into Corporate Insolvency Resolution Process (CIRP) on August 21, 2025
Source reference: para 1The Appellant, a suspended director of the CD, challenged this order, proposing a settlement to refund the homebuyers with 9% interest
Source reference: para 16(xvi)Simultaneously, various financial institutions (PNB, Edelweiss) and allottees from other projects sought intervention, arguing that the CIRP should encompass the entire company due to widespread defaults
Source reference: para 5-8Issues
1. Whether the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor should be confined specifically to the "Raheja Krishna Housing Scheme" project.
Source reference: para 2(xxii) / para 112. Whether the claims of financial institutions and intervenors regarding other projects should be entertained within the current insolvency proceedings.
Source reference: para 18Law Applied
Section 7 of the Insolvency and Bankruptcy Code, 2016, regarding the initiation of CIRP by financial creditors
Source reference: para 1Supreme Court's precedent in Mansi Brar Fernandes v. Shubha Sharma & Anr. (2025), which established that real estate insolvency should, as a rule, proceed on a project-specific basis rather than against the entire Corporate Debtor to protect solvent projects and genuine homebuyers
Source reference: para 14Navin M. Raheja v. Vipul Jain & Ors. (2026), involving the same Corporate Debtor, where it was held that CIRP initiated by allottees of one project must be limited to that specific project to avoid jeopardizing other stakeholders
Source reference: para 13, 17Reasoning
The court observed that the Section 7 applicants were exclusively allottees of the "Raheja Krishna Housing Scheme" and the default was project-specific
Source reference: para 10-11Applying the principle of "Project-Wise CIRP," the court reasoned that subjecting the CD’s entire infrastructure and multiple projects to a collective insolvency process would cause "collateral prejudice" to homebuyers of other projects that might be viable
Source reference: para 14-15The court noted that the IBC is a forum of last resort for revival, not a mere debt recovery mechanism; therefore, a balanced judicial approach is required
Source reference: para 13Regarding intervenors like PNB and Edelweiss, the court determined that since the CIRP is now project-specific, the Interim Resolution Professional (IRP) must only accept claims pertaining to the "Krishna Housing Scheme"
Source reference: para 18Financial creditors of other projects remain free to pursue independent legal remedies, ensuring that the insolvency of one project does not stall the development of others
Source reference: para 18-19Holding
The NCLAT modified the NCLT's order dated August 21, 2025, and held that the CIRP against M/s. Raheja Developers Ltd. shall be confined strictly to the "Raheja Krishna Housing Scheme" project
The IRP was directed to issue a corrigendum to the public announcement in ‘Form-A’ to invite claims specifically for this project within 14 days
Source reference: para 19(ii)The court granted liberty to Respondents 1 to 130 to file a Section 12A application if a settlement is reached
Source reference: para 19(v)It further clarified that other creditors and financial institutions are free to prosecute independent proceedings regarding other projects, unaffected by this project-specific CIRP
Source reference: para 19(iv)Original Court PDF
Navin M RahejavsShravan Minocha And Ors & Ors.
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in