RERA Orders Passed During a Moratorium: What the NCLAT Decided in the Raghuleela Builders Case

A buyer who has paid in full for a unit that was never delivered has an obvious grievance. If the developer is admitted into insolvency while the buyer’s RERA appeal is pending during the IBC moratorium, two questions arise: can the appellate authority continue with the appeal, and can the buyer’s claim be founded on the order it passes during the moratorium? The National Company Law Appellate Tribunal (“NCLAT”) addressed both questions in Vandana Garg, Resolution Professional of Raguleela Builders Pvt. Ltd. v. Mysore Petro Chemicals Ltd., Company Appeal (AT) (Ins.) No. 361 of 2024, decided on 27 May 2026 by Justice N. Seshasayee (Judicial Member) and Mr. Arun Baroka (Technical Member).

The Sequence of Events

The claimant had agreed in July 2015 to purchase a commercial unit in a Mumbai project and had paid the entire consideration of ₹12,93,60,000. Possession was due by 30 September 2015 and was not given.

Its complaint before the Maharashtra Real Estate Regulatory Authority was dismissed on 8 October 2020. It filed a RERA appeal before the Maharashtra Real Estate Appellate Tribunal (“RERAA”) in December 2020. While that appeal was pending, the corporate debtor was admitted into the corporate insolvency resolution process (“CIRP”) on 4 October 2021, and the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) came into force. The last date for claims was 5 November 2021.

On 30 June 2022 the RERAA allowed the appeal and directed payment of interest at the State Bank of India’s highest marginal cost of funds based lending rate plus two per cent on the amount paid. The claimant informed the resolution professional the next day and filed its claim in Form B on 19 July 2022. The claim was rejected on the grounds that the RERAA order was passed during the moratorium and that the claim was belated.

The Adjudicating Authority, by order dated 18 December 2023, admitted the claim, holding that it was not belated and that the corporate debtor was bound by the RERAA judgment. The resolution professional appealed.

What the NCLAT Held

An RERA order creating a fresh liability during the moratorium cannot found a claim. Section 14(1)(a) prohibits the continuation of pending suits or proceedings against the corporate debtor, including execution of any judgment, decree or order. The Appellate Tribunal reasoned that the object of the moratorium is to freeze the assets and liabilities of the corporate debtor so that value can be maximised and liabilities met in the order set out in Section 53. On that footing, it held that Section 14 “does not permit or enable creation of any new liability against the corporate debtor from the date of commencement of CIRP”, other than liabilities the Code allows to be treated as insolvency resolution process costs. The RERAA order, passed during the moratorium, was therefore rendered ineffective, and no claim could be maintained on its basis.

In reaching that view the Tribunal relied on P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., (2021) 6 SCC 258, where the Supreme Court held that the moratorium brings pending proceedings to a standstill. It distinguished Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs, (2023) 1 SCC 472, in which the Court permitted customs authorities to assess or determine duty during a moratorium but not to take recovery steps: assessment of an existing liability is not the same as the creation of a new one.

Limitation became academic. Since the claim as framed was not maintainable, the Tribunal declined to decide whether it was filed in time.

The underlying investment survived. The Appellate Tribunal then took a further step. It observed that the IBC “is neither designed as a statute for the divestiture of individual rights, nor is it fashioned as an expropriatory statute”, and that a claim is essentially notice to the resolution professional of a debt. Where the professional has replaced the board and knows what projects the company undertook, the allottees and the amounts they paid can be ascertained from the records. The resolution professional had not disputed the allotment or the amount paid by the allottee. The appeal was accordingly disposed of with a direction to verify whether the claimant had in fact paid consideration to the corporate debtor and to include the claim on that basis.

What this Changes

The order of 18 December 2023 had been read as authority for the propositions that appellate proceedings under the Real Estate (Regulation and Development) Act, 2016 may continue during a moratorium and that a claim based on the resulting order is not belated. Those propositions no longer represent the position: the appellate order of 27 May 2026 holds that a liability created by a RERA order during the IBC moratorium cannot support a claim in the CIRP.

What survives, and is arguably of wider practical importance, is the duty it places on the resolution professional. A debt discernible from the corporate debtor’s own records should be ascertained and included even where the creditor’s formal claim is defective, a theme consistent with Greater Noida Industrial Development Authority v. Prabhjit Singh Soni, 2024 INSC 102, where the Supreme Court treated the form of a claim as directory and recognised the tribunal’s power to recall a plan approval in an appropriate case.

The Framework after 26 May 2026

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (Act 6 of 2026), brought into force in relevant part on 26 May 2026, tightens both sides of this problem:

• Section 18(b) now provides in terms that the interim resolution professional shall verify claims and, if required, determine their value.
• Section 14 carries a new Explanation extending the moratorium to action initiated or continued by a surety against the corporate debtor under a contract of guarantee.
• Section 67B makes contravention of the moratorium punishable by a penalty of not less than ₹1 lakh and up to ₹2 crore, imposed by the Adjudicating Authority; the former criminal offence in Section 74 has been omitted, with pending prosecutions preserved.
• Section 31(6) provides that claims prior to approval of a resolution plan stand extinguished unless the plan provides otherwise, with Explanation III extending the rule to plans approved since the Code commenced, except matters that have attained finality.

Practical Points

• An allottee whose developer is admitted into CIRP should file a claim with the resolution professional on the basis of the amounts actually paid, rather than waiting for a regulatory or appellate authority to quantify compensation.
• A regulatory authority hearing a matter against a company in CIRP should be informed of the admission order; a party that continues to serve the erstwhile management rather than the insolvency professional risks an order that cannot be enforced.
• Resolution professionals should examine the corporate debtor’s project records for allottees and advances, and not treat the absence of a formal claim as the end of the inquiry.
• The distinction that matters is between determining a pre-existing liability and creating a new one. The first may survive; the second, if made during the moratorium, will not.

Frequently Asked Questions

Can a RERA appeal continue during an IBC moratorium?

The NCLAT held that an order passed during the moratorium cannot create a new liability against the corporate debtor that can form the basis of a CIRP claim.

Can a homebuyer still file a claim during CIRP?

Yes. An allottee can file a claim based on amounts actually paid to the corporate debtor, even if a regulatory appeal has not yet resulted in an enforceable order.

Can a RERA order passed during the IBC moratorium support a claim?

According to the NCLAT in Vandana Garg, a liability newly created by a RERA order during the moratorium cannot itself form the basis of a claim against the corporate debtor.

What is the resolution professional’s role in verifying an allottee’s claim?

The resolution professional must examine the corporate debtor’s records and verify claims, including amounts paid by allottees, where the underlying debt can be established from those records

Legal Information Disclaimer

This article provides general information about Indian law as it stood on 16 September 2026. It is not legal advice, and reading it does not create an advocate–client relationship. Statutes, rules and judicial interpretations change, and their application depends on the facts of each matter. Readers should consult the current official text of the laws and judgments cited and should not act on this information without advice specific to their circumstances. This article is published for legal awareness and education and is not intended to advertise or solicit professional work.

Sources / Authorities

1. Vandana Garg, RP of Raguleela Builders Pvt. Ltd. v. Mysore Petro Chemicals Ltd., Company Appeal (AT) (Ins.) No. 361 of 2024, NCLAT, Principal Bench, New Delhi, 27 May 2026 (arising out of the order dated 18 December 2023 of the NCLT, Mumbai Bench Court No. V in I.A. No. 2725/2022 in C.P. (IB) No. 498(MB)/2021) — Indian Kanoon
2. Insolvency and Bankruptcy Code, 2016 — Sections 14, 15, 18, 31, 53, 67B (as amended) — IBBI – Legal Framework
3. Insolvency and Bankruptcy Code (Amendment) Act, 2026 (No. 6 of 2026) — Gazette text (IBBI); Notification S.O. 2625(E) dated 22 May 2026 — IBBI
4. P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd., (2021) 6 SCC 258, Supreme Court of India
5. Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs, (2023) 1 SCC 472, Supreme Court of India
6. Greater Noida Industrial Development Authority v. Prabhjit Singh Soni, 2024 INSC 102, Supreme Court of India
7. IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 — Regulations 6, 12, 13, 36 — IBBI – Regulations