Authority: National Company Law Appellate Tribunal Principal Bench, New Delhi

Order Date: 22 September 2026

Case Overview

The National Company Law Appellate Tribunal (NCLAT) heard two connected appeals - Company Appeal (AT) (Insolvency) No. 1668 of 2026 filed by Krrish and Brahma Buyers Association and Company Appeal (AT) (Insolvency) No. 1775 of 2026 filed by Sanjay Sachdeva & Ors. (individual homebuyers). The appeals challenge the impugned order dated 10 August 2026 passed by the National Company Law Tribunal (NCLT), New Delhi Bench, which admitted a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against corporate debtor Krrish Realtech Private Limited. The Section 7 application was filed by financial creditor Krone Finstock Private Limited.

The appellants, who were not parties before the NCLT, contend that the Corporate Insolvency Resolution Process (CIRP) was initiated based on false and fictitious debt and default manufactured to wipe out the claims of allottees and take away valuable land assets. The appellants allege that the corporate debtor's only asset is a parcel of land situated at Section 63-68 of Gurgaon, which they claim is valued between ₹4,000 crore to ₹6,000 crore.

According to the appellants' arguments, this represents a conscious creation of false urgency, false cause of action, and false claim to push allottees out of the creditor list and usurp properties through the CIRP process. The appellants cited previous attempts by the corporate debtor to declare itself insolvent to avoid obligations to homebuyers.

Specifically, the appellants detailed a transaction where Mr. M.K. Jain & Ors. had filed a Section 7 petition against Krrish Realtech, prompting the corporate debtor to enter into a Loan Agreement dated 25 October 2024 with Krone Finstock for ₹5 crore to pay off M.K. Jain. However, the corporate debtor never paid M.K. Jain as their petition was dismissed by the NCLT on grounds that they were not financial creditors. The ₹5 crore was never returned to Krone Finstock, who then filed the current Section 7 petition, to which the corporate debtor gave a consenting reply admitting default.

The appellants referenced paragraphs 24-27 of the corporate debtor's reply where it admitted default while citing various circumstances including: (a) pursuing legal remedies to challenge a DTCP order dated 10 February 2022 before the Punjab and Haryana High Court; (b) pursuing a writ petition remanded by the Supreme Court for expeditious hearing; (c) challenging confirmation of a Provisional Attachment Order before the Appellate Tribunal under PMLA; and (d) exploring avenues for raising funds to settle the financial creditor's dues.

During arguments, questions were raised about the association's locus standi to file the appeal and whether the allegations could be dealt with under Section 65 of the IBC before the NCLT. Counsel cited conflicting precedents including 'Apnaghar Builders Pvt. Ltd.' vs. 'Intense Fitness & Spa Pvt. Ltd. & Ors.' versus 'Beacon Trusteeship Ltd.' vs. 'Earthcon Infracon P. Ltd. & Anr.' and 'Embassy Property Developments Private Limited' vs. 'State of Karnataka & Ors.'

Final Outcome

The NCLAT issued notice to respondents and directed the appellant to provide mobile numbers/email addresses of respondents within two days. The tribunal allowed four weeks for filing replies and four subsequent weeks for rejoinders. The appeals were listed for hearing on 5 November 2026. As an interim measure, the NCLAT ordered that if a Committee of Creditors (CoC) is constituted, it shall not issue 'Form-G' until the next date of hearing.

Topics: Insolvency Proceedings, Real Estate Dispute, Creditor Rights