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Homebuyers of Lavasa Corporation have approached the appellate tribunal against the approved insolvency resolution plan, raising concerns over inadequate protection of their interests. The plan, cleared by lenders with over 90 percent voting, has now come under scrutiny for its treatment of buyers awaiting possession. Lavasa’s long insolvency process, marked by multiple failed bids and delays, continues to face hurdles. The latest legal challenge highlights the ongoing conflict between creditor recovery and homebuyer rights, which remains a key issue in large real estate insolvency cases.
Homebuyers of Lavasa Corporation have moved the National Company Law Appellate Tribunal (NCLAT), challenging the insolvency resolution plan that was approved by the National Company Law Tribunal (NCLT). The petition questions whether the plan ensures fair treatment for homebuyers, many of whom have been waiting for possession for several years. Advertisement
The resolution plan had earlier received approval from the committee of creditors (CoC), with more than 90 percent of lenders voting in favour. Following this, the NCLT cleared the plan, allowing the resolution process to move ahead. However, homebuyers have now raised concerns that their claims and long-term interests were not fully addressed during the approval process.
They have stated that while homebuyers are recognised as financial creditors under the Insolvency and Bankruptcy Code (IBC), their position is different from banks and institutional lenders. Their argument indicates that they are end users waiting for homes, and therefore require stronger protection within the resolution framework.
Lavasa Corporation, which developed a large planned hill city near Pune, has been under financial stress for years. The company entered insolvency after accumulating significant debt, with total liabilities estimated at around INR 6,400 crore. The insolvency process has seen multiple delays, failed bids, and restarts, making it one of the more prolonged real estate resolutions in the country.
In earlier stages, different bidders had shown interest in reviving the project, but competing offers and legal disputes slowed progress. At one point, the insolvency process had to be extended to allow fresh bids and maximise recovery for lenders. The final approved plan emerged after several rounds of negotiations and revisions.
Despite the progress on paper, concerns remain about execution and delivery. Homebuyers have pointed out that delays have already impacted them significantly, and any uncertainty in the resolution plan could further affect timelines for possession and completion of pending units.
The current challenge before the appellate tribunal adds another layer of legal review. The tribunal will examine whether the approved plan meets the requirements of fairness and equitable treatment for all stakeholders, especially homebuyers who have remained involved in the process for a long time.
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