Homebuyer approaching NCLT after builder fails to give assured returns

When can a homebuyer approach the NCLT, if he was promised “assured returns” but the builder fails to provide the same? What remedies does he have?


A homebuyer can approach the NCLT under the Insolvency & Bankruptcy Code 2016 (IBC). If a buyer fails to offer the assured returns that have been promised to a homebuyer, the homebuyer is entitled to proceed with insolvency proceedings against the defaulter (builder) under the IBC.

What are assured returns?

Assured return in Indian Real Estate is the fixed monthly return given by the builder on the amount invested by a person, usually until he receives possession of his flat.

Are Assured Returns a form of investment?

Assured returns are in the form of an investment by the buyer to the builder. As per the NCLAT case of Nikhil Mehta & Sons (HUF) & Others v AMR Infrastructure Limited, the home-buyers were "investors" who were investing in a "committed returns plan" whereas, the builder agreed to pay a monthly committed return to their Investors. Logically, it followed that committed returns would be in the nature of "debt" under section 3(11) of the IBC.

What remedy do I have if the builder is not repaying the Assured Returns?

The 2018 Insolvency & Bankruptcy Ordinance is a step forward for home-buyers as it places them at par with the ‘financial creditors’ i.e. banks. This gives even a single home-buyer the power of initiating insolvency proceedings against the builder if he fails to make payments under any such scheme of assured returns or buy-back scheme. All cases of IBC are placed before the NCLT, that has the power to sell the assets of the defaulting party to repay the aggrieved investors

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