Possession Delay [NCLT]


If the real estate company is in poor financial condition and is unable to continue or finish the concerned real estate project, home-buyers can initiate insolvency proceedings in the National Company Law Tribunal [NCLT].

Before initiating insolvency proceedings, sending a legal notice to the builder serves as a final warning. In case a settlement is still not reached, you should then file the application for initiating insolvency process.


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Criminal Aspect

  • Criminal complaint Under section 498A of Indian Penal Code, 1860 and its proceeding before CAW cell

Civil Aspect

  • Petition for Divorce under various grounds as per Hindu marriage Act viz.
  • Petition on the ground of mutual consent
  • Petition on the ground of Contested Divorce
  • Petition on the ground of cruelty
  • Petition on the ground of Desertion
  • Petition on the ground of impotency
  • Petition on the ground of adultery
  • Petition for Custody of children under provisions of HMA, 1955
  • Application for seeking Interim maintenance and expenses by wife
  • Application for restitution of conjugal rights
  • Suit for partition of the joint property owned jointly by husband and wife


  • Application for buying of property in the Project
  • Builder- Buyer Agreement
  • Receipts of payments made to the Builder
  • Letters/ email correspondences between the Buver and the Builder
  • Brochure of the Project
  • Letter of Allotment

Frequently Asked Questions

There are three strong points regarding which a husband and wife have to reach a consensus.

  1. One is alimony or maintenance issues: As per law, there is no minimum or maximum limit of support. It could be any figure or no figure.
  2. The custody of the child: This must necessarily be worked out between the parties, as it is inevitably what requires the greatest amount of time in divorce without mutual consent. Child custody in a mutual consent divorce can also be shared or joint or exclusive depending upon the understanding of the spouses.
  3. The third is the property: The husband and wife must decide who gets what part of the property. This includes both movable and immovable property. Right down to the bank accounts, everything must be divided. It is not necessary for it to be fair, so long as it is agreed to by both parties.

The duration of a divorce by mutual consent varies from six to 18 months, depending on the decision of the court. Usually, the courts prefer to end mutual consent divorces sooner, rather than later. As per Section 13 B of Hindu Marriage Act, 1955 and Section 28 of the Special Marriage Act, 1954, the couple should be living separately for at least one year before divorce proceedings can begin. Section 10A of Divorce Act, 1869, however, requires the couple to be separated for at least two years. Do note that living separately does not necessarily mean living in different locations; the couple only needs to provide that they have not been living as husband and wife during this time period.”

Before anything, you should be aware to produce a divorce notice to your spouse. This is to clarify the emotions and a platform to initiate your thoughts on discontinuing the relationship. A legal notice for divorce will bring in clarity to the other spouse about the future relationship which you want to hold. A spouse can send a legal notice for divorce to the other spouse in order to communicate his/her intention to take legal steps forward covering the marriage relationship. It is a formal communication which is the first step to break the 2018husband and wife 2019 connection.”

When two people are married, they have an obligation to support each other. This does not necessarily end with divorce. Under the Code of Criminal Procedure, 1973, the right of maintenance extends to any person economically dependent on the marriage. This will include, therefore, either spouse, dependent children and even indigent parents. The claim of either spouse (though, in the vast majority of cases, it is the wife), however, depends on the husband having sufficient means. When deciding the payment on the alimony, the court will take into account the earning potential of the husband, his ability to regenerate his fortune and his liabilities. In case either spouse is unable to pay for the divorce, then the spouse who earns will have to pay these expenses

In a contested divorce, the alimony, its amount and tenure, depend upon the length of the marriage. A divorce after a decade of marriage entitles the spouse to a life-long alimony. The other essential factors are: Age of the spouse (or the person who is ought to receive the alimony). Economic condition or the earnings of the person who is to provide the alimony. The health of both spouse (the failing health or a medical condition of one of the spouses who is going to receive the alimony may act in favour of him or her. They can claim a larger alimony on the basis of their failing health). 4. The spouse that retains custody of the child would either pay lesser alimony or pay a greater amount while the child is a minor.

It seldom matters whether you or your spouse own the property. If you are married irrespective of the fact that a divorce petition has been filed you have the right to occupy the property. If you are also looking after children, the case is much stronger. While the property may be granted to one or the other spouse in the divorce settlement, until this is done, both spouses have the right to remain on the property.

Many assume that the mother always gets custody of her children. This is not the case. While the courts usually agree to the decision of the parents in a mutual consent divorce, the courts will look into the best interest of the child. In a contested divorce, the courts will examine the ability of the mother or father to be a parent to the child, for example. You cannot take money into consideration. Usually, the court provides the custody of their children to non-working mothers, but the fathers are expected to provide financial support.

Court fees for filing a divorce are low; the cost is mainly in the fees you pay your lawyer. Lawyers tend to charge fees for appearing in court and doing any other work. Depending on how intensely it works, therefore, it may cost anywhere from the low ten thousands to lakhs of rupees.

One can dissolve a marriage in India by means of annulment. The procedure for annulment is same as that of divorce, except that the grounds for annulment are different from that of divorce. Reasons for annulment are fraud, the pregnancy of wife by a person other than the husband, impotence before the marriage and subsisting even at the time of filing the case. Once the Indian court grants an annulment, the status of the parties remains as it was prior to the marriage.

A marriage is automatically void and is automatically can be invalid when the law prohibits it. Section 11 of the Hindu Marriage Act, 1955 deals with: Any marriage solemnized after the commencement of this Act shall be null and void and may, on a petition presented by either party thereto, against the other party be so declared by a decree of nullity if it contravenes any one of the conditions specified in clauses (i), (iv) and (v), Section 5 of the Act.

  • Bigamy: If either spouse was still legally married to another person at the time of the marriage then the marriage is void, and no formal annulment is necessary.
  • Interfamily marriage: A marriage between an ancestor and a descendant, or between a brother and a sister, whether the relationship is by the half or the whole blood or by adoption.iii. Marriage between close relatives: A marriage between an uncle and a niece, between an aunt and a nephew, or between first cousins, whether the relationship is by the half or the whole blood, except as to marriages permitted by the established customs

A voidable marriage is one where an annulment is not automatic and must be sought by one of the parties. Generally, an annulment may be sought by one of the parties to a marriage if the intent to enter into the civil contract of marriage was not present at the time of the marriage, either due to mental illness, intoxication, duress or fraud. The duration for obtaining divorce varies from case to case and place to place. Generally speaking, contested proceedings take 18 to 24 months. Mutual consent varies from 6 months to 18 months

The National Company Law Tribunal follows the Insolvency and Bankruptcy Code, 2016. It’s a quasi-judicial body set a strong under section 408 of the Companies Act, 2013 strong with the authority to adjudicate the insolvency Process for both Companies and LLPs (Limited Liability Partnerships).

Major Functions of NCLT:- Power to cancel registration or dissolve a company -Investigate the affairs of the company -Freeze assets of a company -Render liability to promoters -Change the liability from limited to unlimited -Address shareholder grievances on the rejection of companies in transferring shares and securities -Can take class actions suits for depositors who are seeking remedy for the omissions and acts on part of the company.

You have to submit a plea for insolvency to NCLT against the company. You will get a response from NCLT within 14 days; they will either accept or reject your plea. After NCLT accepts your plea, they will appoint an IRP(Interim Resolution Professional. The IRP will draft a resolution plan. The IRPs are giving a 180 days time-frame which can be extendable by 90 days to come up with a resolution plan. The court initiates a corporate Insolvency Resolution process once IRP submits the resolution plan. During the period of an insolvency proceeding, the board of directors of the company stands suspended, and the promoters do not have a say in the management of the company. The IRP, if required, can seek the support of the company’s management for day-to-day operations. In case the Corporate Insolvency Resolution Plan (CIRP) fails to revive the company, NCLT will initiate a liquidation process.

Step 1- Send a legal notice to your developer mentioning the delay. You can hire a lawyer to help you with the process. The legal notice should make it clear that you are approaching NCLT as a financial creditor if your flat is not delivered in a specified time limit.

Step 2- If you do not hear from the developer or they fail to the owner the commitment, reach out to NCLT bench under which your jurisdiction falls.

Step 3- File an insolvency plea against the developer’s company. Once your plea is accepted, the IRP process would start.

The Government of India amended the Indian Bankruptcy code to allow homebuyers to be treated as financial creditors under section 7. As a home buyer, you have a right to have a representation in the committee of creditors, your authorized representatives can vet the IRP or recommend the removal of company management. A total of 1800+ cases have been filed against errant developers under this code.

As per section 432 of the Companies Act, 2013, You can appear in person or authorize – Chartered accountant – Company secretary – Cost accountant – or a legal practitioner (Lawyer) to present your case before both NCLT and NCLAT

Both RERA and NCLT are fast track courts. You should approach RERA if you want the developer to complete the project in time and get a compensation for the delay. If you are looking for a refund of the amount you paid alongwith interest then approach NCLT. NCLT orders are binding in nature; non-execution at developer’s end can force them toward liquidation and insolvency. The execution powers of RERA is still not clear. In many instances, developers has not followed RERA instructions and homebuyers are clueless on what to do.

The buyer can mention in their application that he\she wants the property only as per the terms set out in the allotment letter. As a primary objective, the Resolution Professional overseeing the insolvency resolution process will try to ensure that the development of the project continues.

As per the provisions of Insolvency and bankruptcy code, 2016, homebuyers are considered to be financial creditors of the builder company. The investment made by a home buyer is considered a debt given to the builder. In cases of delay of possession, a homebuyer, being a financial creditor can file an application before NCLT to initiate insolvency proceedings against the builder. The procedure provided by the code is a time-bound procedure and hence, it provides a time-bound remedy to the homebuyers.

If you builder\/developer has delayed the possession of your property for an unreasonable amount approach RERA or NCLT. Here are the steps you can follow in this case:

1.Consult with a legal expert to decide which forum to choose depending on your objectives (You want a refund/Quick delivery of flats/compensation for the delay)

2.If your project is small and the developer is working on it, albeit at a slow pace, you should avoid approaching NCLT. If the insolvency process starts all projects will be affected

3.Based on your objective a legal expert can suggest you the right forum

4.Once you have decided on the forum, send a legal notice to the developer asking them to take rectifying steps otherwise face the legal consequences

5.If the developer is responsive enough, they will get in touch with you and rectify the situation. If not, you may need to proceed with the case. Ask your legal expert to prepare your drafts according to the forum of your choice.

Here are the steps involved in filing a complaint in NCLT

Step 1- Issue a demand notice and a Notice for initiation of insolvency proceedings through a competent.

Step 2- Gather all facts about the case such as details of promoters of the company, proof of payments, bank loans, 

Step 3- Go to NCLT website.

Step 4- Click on Applicant Corner.

Step 5- Sign up as a new user\create an individual account.

Step 6- Enter basic details and verify both your mobile number and email id via OTP.

Step 7- Once you have successfully logged in, you can e-file your complaint against the builder.

You should approach NCLT under the following conditions-

-When the possession is delayed beyond reasonable limits -When your builder is not responding to any of your communications -In case you see that banks and other entities are approaching NCLT against your builder -In conditions where you think that a swift binding order is required to secure your investment -In case you are looking for a refund of your money along with the interest.

NCLT cases are going against AMR, Raheja Developers and HDIL already. If you have purchased a property under assured returns plan, NCLT will consider you as a financial creditor. You are eligible to start an insolvency proceeding against the builder under Indian Bankruptcy Code. One of the landmark judgement was against the builder AMR by NCLAT. The NCLT has ruled in favor of builders and termed the purchase as a simple purchased goods and kept homebuyers out of the purview of financial creditors. The group of homebuyers approached NCLAT against this order. The NCLAT in its judgement held that the assured return scheme was used by AMR to get a huge unsecured amount for the purpose of development which otherwise would have cost AMR a significant amount in form of interest. Hence, NCLAT upheld the status of homebuyers as a financial creditors.

If the builder has delayed in handing over the possession of the property, you can send him a legal notice before initiating insolvency proceedings against him. It is advisable that you seek the assistance of an expert lawyer to draft and send the legal notice. The lawyer will help you draft a notice. MyAdvo can help you in sending the legal notice through an expert property lawyer. Contact us to hire an expert property lawyer for sending a legal notice.

Assured return in real estate transactions is the fixed monthly return given by the builder on the amount invested by a buyer, usually payable until he receives possession of his flat. The assured return factor became crucial while deciding the financial creditor status of homebuyers.

Assured returns are a form of an investment by the buyer to the builder. As per the National Company Law Appellate Tribunal (NCLAT), the home-buyers were investors who were investing in a committed return plan whereas, the builder agreed to pay a monthly committed return to their Investors. It was also held by the Court that committed returns would be in the nature of debt under Insolvency and Bankruptcy Code.

Recently, home-buyers have been recognised as financial creditors under the Insolvency and Bankruptcy Code, 2016 (IBC). Pursuant to this recognition, in case the builder fails to pay promised assured returns, home-buyers can approach the National Company Law Tribunal to initiate insolvency proceedings against the builder under the IBC. NCLT has been bestowed with power to sell the assets of the builder to repay the aggrieved investors.

Insolvency refers to a situation when an individual or a company is unable to meet its financial obligations to its creditors or lenders. A builder may file for insolvency on its own when he is unable to clear his debts once they become due or unable to carry out its other obligations. In order to be declared insolvency, the builder would have to file an application for the same, after which its financial status will be analysed by an insolvency professional. Creditors\/buyers of properties can also apply to the NCLT for the business of the builder to be declared insolvent if he is unable to service his debt when it becomes due or unable to continue and\/ or finish the concerned real estate project.

A person who has taken a loan from a financial institution must continue to pay their Equated Monthly Installments (EMIs) in accordance with the loan agreements irrespective of any insolvency proceedings.

There is no guarantee that the home will be delivered. It would depend on the resolution plan that is formulated. If a resolution plan is proposed wherein the development of the real estate property could be completed and committee of creditors agree to that resolution plan by a majority of 66%, then the homebuyers can get their home-delivered.

As on 21st December 2019, there are 21158 cases are e-filed in NCLT. On an average there are 1250 new cases filed every month.

No. NCLT order can be challenged in NCLAT as per the IBC code. However, in its december 2019 judgement, the Supreme Court of India ruled that, If an NCLT order falls under the realm of public law, i.e. if it affects the general public at large, the high court can exercise its power under article 226 of the constitution.

Steps to Follow

Steps if considering family matter

You will be required to share scanned copies of documents related to the property for verification by our lawyer
The application will be drafted and shared with you for your review and approval within 7 days of receiving the documents
Our lawyer will make preliminary arguments before NCLT and get the Application admitted
NCLT will confirm a Resolution Professional to oversee the process
The resolution process comprises of various stages:
1) Publication of notice
2) Processing of claim
3) Information Memorandum
4) Meeting of Committee of Creditors (COC)
5) Call for resolution plan
After receiving the resolution pian, the RP will conduct a meeting of COC for voting. If 66% of voting is done in favour of a resolution plan, then it will be adopted by COC