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Secured Creditor cannot be provided with the flat/apartment by preference over the allottees

In Flat Buyers Association Winter Hills – 77, Gurgaon Vs. Umang Realtech Pvt. Ltd through IRP & Ors.,  several interesting issues were addressed.

One of them being a  Secured  Creditor cannot be provided with the flat/apartment by preference over the allottees for whom the project has been approved:

Reason: A  Secured  Creditor  such  as  financial  institutions/banks, cannot be provided with the asset (flat/apartment) by preference over the allottees (Unsecured Financial Creditors) for whom the project has been approved. Their claims are to be satisfied by providing the flat/apartment. While satisfying the allottees, one or other allottee may agree to opt for another flat/apartment or one tower or other tower if not allotted to any other. In such case their agreements can be modified by the Interim Resolution Professional/ Resolution Professional with the counter signature of the Promoter and the allottees, so that the allottees (financial creditors), who are on rent or paying interest to banks may like to get earlier possession and are relieved from paying rent or interest to banks.

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