The case that put a crowd at the courtroom door — and a shield on the rescued company. Sit in the Gallery and watch the homebuyers’ revolt. Step up to the Bar and learn why every challenge failed. Take the Bench and master the two over-readings that trip up even seniors.
Most readers start in the Gallery — and climb before they realise it.
The waiting families. Flats paid for, possession years late. Then the law hands homebuyers a weapon: any single buyer can drag the builder into insolvency court — the Supreme Court itself blesses it in the Pioneer case (2019).
The flood. The Union’s own numbers, placed before the Court: 253 allottee cases in two years… then 2,201 in the next eighteen months. One angry buyer could now put an entire project — and every other family in it — into play.
The midnight gate. 28 December 2019, an Ordinance: no more lone petitions. A buyer now needs 100 allottees, or 10% of the project — whichever is less — standing together. And those already in the queue? Thirty days to find the numbers, or the petition is “deemed withdrawn”.
The fury. Buyers who had already filed cry betrayal — a right used, then snatched mid-case. Dozens of writ petitions land in the Supreme Court under Article 32. Manish Kumar’s name goes first on the board.
The other gift in the same Act. Quietly, the same amendment adds Section 32A: once a rescue plan hands a company to clean new owners, the company’s old crimes cannot chase it — prosecutions end, its assets are safe from attachment. The old promoters and officers, though, still face the music.
The verdict. The Court calls the Code one of the most “significant and dynamic economic experiments” of the legislature — and upholds everything: the gate, the thirty days, the shield. Every petition dismissed.
Epilogue — but nobody’s claim died. The Court softened the landing with its special powers: two months to come back with the crowd, no fresh court fee, the lost time condoned. Homebuyers remain financial creditors with a seat at the table — the courtroom door just needs a crowd now. And Section 32A became the bedrock on which every rescue bid in India is priced.
Blocked: the flat buyer — who can no longer knock on the insolvency court’s door alone; the door now needs 100 companions or 10% of the project.
Blessed: the company buyer — the resolution applicant who takes over a rescued company gets it wiped clean of its old crimes (while the old bosses stay on the hook).
If you got both — you’ve understood what most 2020 headlines missed: this was one Act playing defence and offence at once.
A judgment is authority only for what it decides. Fix the questions before you read a single answer.
The Gate: can Parliament require 100 allottees or 10% of a project to file together, without violating Article 14?
Workability: how does one buyer even find 99 others — does the threshold fail for impossibility?
The queue: can the gate be slammed on petitions already pending — thirty days to comply or “deemed withdrawn”?
The Shield: can a rescued company be immunised from its own past offences (s. 32A) — what about the victims?
Two layers, so you always know whose voice you are reading: Our reading is this page’s interpretation — we state it and we stand behind it. The Court is the judgment verbatim, para-numbered from the certified copy.
Our readingThe threshold is constitutional. The Code is an economic experiment, and courts defer heavily to the legislature’s design choices — the number itself (100 / 10%) is pure policy, beyond judicial second-guessing (Para 134, 214).
Our readingThe count is taken project-wise: the 100 / 10% must all be allottees of the same real estate project — not of the builder’s empire as a whole. This cuts both ways: a smaller pool to convince, but no borrowing numbers from a sister project (Para 140).
Our readingThe “impossible to find 99 others” argument fails on the statute book itself: RERA obliges every promoter to publish quarterly allottee and booking data on a public web page; security- and debenture-holders have the s. 88 registers under the Companies Act (Para 162–164).
Our readingThe third proviso is a one-time transition rule for petitions filed before 28.12.2019 and not yet admitted: thirty days to muster the numbers, failing which the petition is deemed withdrawn before admission. Crucially, a deemed withdrawal is not a bar to filing afresh on the very same default (Para 261, 358).
Our readingSection 32A is valid — and precise. The company’s criminal liability ends once an approved plan passes control to clean hands, and its property is safe from attachment, seizure and confiscation. But the shield stops there: the people who ran the show remain fully prosecutable (Para 253, 257).
Our readingEvery challenge fails — but the Court softens the landing under Article 142: two months to refile compliant petitions on the same default, exempt from fresh court fees, with the time lost in the withdrawn petitions condonable under s. 5 of the Limitation Act (Para 371–372). Explanation II to s. 11 (a corporate debtor may file against another corporate debtor) also survives (Para 245).
1 · Deference first. The Code is an economic statute; within that field the legislature may experiment, and “there is nothing like a perfect law”. The number 100, the figure 10% — these are policy, not constitutional arithmetic (Para 134, 214).
2 · Workability answered, not assumed. Instead of accepting “impossible to organise”, the Court went looking for the machinery — and found it already on the statute book: RERA’s mandatory public web page per project; the Companies Act registers (Para 162–164). An argument of impossibility dies when the statute itself supplies the means.
3 · No vested right in an un-admitted petition — but no trap either. Until admission, a s. 7 applicant has no crystallised right that the amendment could “snatch”; the third proviso merely re-routes pending filers through the new gate. And the exit is humane: refiling on the same default is open, delay is condonable, and Article 142 waived the court fees (Para 261, 358, 371–372).
“We uphold the impugned amendments.” Five words end dozens of petitions — and then Article 142 makes sure not one petitioner is left without a road back. — Para 372: the rare judgment that dismisses everyone yet strands no one.
We read all 465 pages of the certified copy so you don’t repeat what the summaries got wrong. Both findings are checkable by anyone with the PDF.
Wrong. The withdrawal operates before admission and the Court said in terms that it “would not… bar a fresh application even on the same cause of action” — with delay condonable under s. 5 of the Limitation Act.
The move: when opposing counsel calls your client’s earlier petition “dead”, hand up Para 358 — and the Article 142 directions at Para 372 that even waived the court fee for the return trip.
✓ verified against certified copy · Para 358, 372Wrong. The immunity belongs to the corporate debtor and its property — and only once an approved plan passes control to hands untainted by the old regime. Every person “in charge of, or responsible” for the offence “will continue to be liable to be prosecuted and punished” — and owes a statutory duty to assist the investigation (s. 32A(3)).
The move: when a promoter waves 32A at the ED or the prosecutor, point to Para 253 and 257 — “it is not as if the wrongdoers are allowed to get away.”
✓ verified against certified copy · Para 253, 257A judgment is a tool with two edges. From the Bench you must see both — you will not always be on the same side of it.
Are at least 100 allottees of the project joining the application?first proviso to s. 7(1) — “not less than one hundred”
Or do the joining allottees make up at least 10% of the project’s total allottees?the alternative arm — “whichever is less”
Are they all from the same real estate project?Para 140 — the critical mass is project-wise
Are they joined in the application at the time of filing?the application must be “filed jointly”
Answer the four questions to see whether the petition clears the s. 7(1) gate.