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A strong Committee of Creditors vote did not save the SRS Royal Hills Phase-2 resolution plan. On , NCLT Chandigarh rejected a clause that preserved contractual prices for buyers who had paid at least 5% but imposed approval-date circle rates on those below 5%. Valuation defects and incomplete homebuyer verification also mattered. The Bench directed another resolution attempt rather than immediate liquidation. Official order, paragraphs 3.6–6.
Order details and the question decided
| Item | Verified detail |
|---|---|
| Tribunal | NCLT, Chandigarh Bench, Court-II |
| Members | Khetrabasi Biswal, Judicial; Kaushalendra Kumar Singh, Technical |
| Application | IA(IBC)(Plan)/2(CH)2024 |
| Underlying petitions | CP(IB)No.167/Chd/Hry/2020 and CP(IB)No.86/Chd/Hry/2022 |
| Corporate debtors | SRS Real Estate Ltd. and SRS Retreat Services Ltd. |
| Applicant | Shyam Arora, Resolution Professional |
| Resolution applicant | Orange Castle Private Limited |
| Decision date | 9 September 2026 |
| Disposition | Plan-approval application rejected; fresh Form G and valuation directed |
The principal drafting question was whether a plan could separate otherwise similarly situated unit allottees by their historic payment percentage and then impose different bases for the balance price. This was a plan-approval decision, not an award of compensation to individual homebuyers. The caption and application appear on pages 1–3 of the official order.
What the proposed 5% distinction actually did
Clause XIX(4) created two groups. Buyers who had paid 5% or more of their agreed consideration would pay their outstanding amounts using their existing Builder-Buyer Agreement rates. Buyers who had paid less than 5% would face the circle rate prescribed by the government authority at the date of NCLT approval. The proposed schedule also required payment of the communicated outstanding amount within 90 days, with 18% annual interest on non-payment, and fresh agreements.
These were terms of the rejected proposal. They are not payment directions that this order imposed on homebuyers. Paragraph 3.6 reproduces the plan language; paragraphs 3.6.1–3.6.4 explain why the pricing distinction failed. Official order, pages 19–23.
The plan had received 97.22% voting support in SRS Real Estate’s CoC and 100% in SRS Retreat Services’ CoC. That support established the commercial decision placed before the Tribunal, but did not itself establish legal compliance. The Bench treated the allottees as one class of financial creditors under Sections 5(8)(f) and 21(6A)(b) of the Insolvency and Bankruptcy Code, 2016.
Why commercial wisdom did not cure the clause
The Bench applied Section 30(2)(e), which requires a resolution plan not to contravene applicable law, together with the approval scrutiny under Section 31. It found no intelligible distinction or rational connection between the 5% threshold and CIRP’s objectives. The practical effect was to preserve agreed rates for one group while selectively replacing another group’s contractual rates with prevailing circle rates.
The Tribunal held that this was arbitrary discrimination within the homebuyer class. Its reasoning concerned the particular classification and pricing mechanism before it. It should not be expanded into a statement that every distinction between creditors, every difference in individual balances, or every modification of a homebuyer agreement is automatically unlawful. The issue was the basis and legal effect of this plan’s distinction. Official order, paragraphs 3.6.2–3.6.4.
For a plan reviewer, the useful inquiry is therefore concrete: identify the legal class, compare the proposed treatment, and ask what evidence and lawful rationale justify a difference. Merely inserting a percentage threshold and obtaining a large vote does not answer those questions. This is Veritect’s application of the order, not an additional direction issued by the Bench.
Valuation and missing claims were separate defects
The pricing clause was not the only problem. The Bench examined the valuers’ selected rates, underlying support and calculations. It found arbitrary rate adoption and called for fresh valuation of the assets at the 2022 CIRP commencement date, together with a current valuation of unsold flats because considerable time had passed. These two dates served different purposes; the order did not simply replace every historic valuation date with the order date. Official order, paragraphs 3.5–3.5.3 and 5.
Claim completeness also remained unresolved. Books and customer documents had been seized by the Enforcement Directorate, limiting the RP’s access. Paragraph 4.1 identified 59 homebuyers from a supplied list whose claims still required consideration. A proposal to consider those claims did not clearly identify how the buyers would be informed or who would notify them. The Tribunal connected access to records with meaningful verification; it did not declare all 59 claims admitted without scrutiny.
These findings show why an objection should identify a documented failure. A dispute about a plan’s price is stronger when tied to an arbitrary classification, an unsupported valuation input, or a specific gap in genuine claims, rather than a general demand that the Tribunal prefer another commercial outcome.
What the Tribunal ordered next
The Bench rejected the plan-approval application. Because the project involved numerous homebuyers awaiting possession, it directed the RP to issue a fresh Form G and make another effort to secure a compliant resolution plan. It required the fresh valuations described above and extended CIRP by 90 days from uploading of the order. Official order, paragraphs 5–6.
The distinction between delivery and upload matters. This note does not calculate a final compliance deadline without a verified upload date, or report whether a replacement plan was subsequently filed. Nor does rejection of this plan mean that the project was ordered into liquidation on 9 September.
Practical review points for a real-estate plan
A source-grounded review can use the following questions:
- Does a payment-based grouping change the price basis, rather than merely recognise different amounts already paid?
- Is the classification supported by a lawful, documented rationale within the relevant creditor class?
- Do valuation reports explain their rates, evidence and arithmetic, and does the CoC have the information needed to assess them?
- Are missing genuine allottees identified, notified and verified through a workable process?
- Does the requested relief preserve the difference between correcting statutory defects and replacing the CoC’s commercial judgment?
These are analytical prompts drawn from this order. They are not a substitute for the project’s records, the applicable statutory version or later appellate directions.
Questions practitioners and homebuyers may ask
Did NCLT order all buyers to pay the current circle rate?
No. That pricing mechanism appeared in the proposed plan and was one reason approval was refused. The order directed a fresh resolution exercise.
Does a nearly unanimous CoC vote guarantee approval?
No. In this application, high voting support did not cure the Bench’s findings of statutory non-compliance, defective valuation and incomplete claim consideration.
Were all outstanding homebuyer claims admitted automatically?
No. The order discussed the need to obtain records and verify remaining claims. It did not dispense with verification or determine each buyer’s final entitlement.
Source and scope
This case note analyses the NCLT Chandigarh order of 9 September 2026, particularly paragraphs 3.5–6. It describes the decision as delivered. Targeted internal and official-source checks on 1 November 2026 did not establish its subsequent treatment; that is not confirmation that no appeal, stay or later order exists. Current procedural action requires the latest case record.
Related reading: NCLT’s treatment of a defective mixed-default Section 9 petition illustrates a different statutory gate at the admission stage.