Section 7 by allottees: meeting the 100-or-10% threshold

The Insolvency and Bankruptcy Code treats allottees in a real-estate project as financial creditors. That door opened wide, and was then narrowed: an application by allottees must now be brought jointly by a threshold number of them.

The threshold

The application must be filed jointly by not less than one hundred allottees of the same real estate project, or not less than ten per cent of the total number of allottees under that project, whichever is less. Both limbs are computed project-wise, which is where most petitions run into difficulty.

Assembling it

1. Fix the project boundary as registered — phases registered separately are ordinarily separate projects.
2. Establish the total number of allottees for that project from the registered records.
3. Obtain authorisations from each participating allottee, in a form that survives scrutiny.
4. Prove default: the amount, the date it fell due, and the documents that establish both.

Before you commit to this route

• Insolvency is a collective remedy, not a recovery mechanism for one buyer — the outcome is a resolution plan, not a refund.
• Admission triggers a moratorium that halts your own RERA proceedings.
• Where the project is viable, a RERA route or a completion-focused resolution may serve allottees better.

The threshold is a real filter, and meeting it takes organisation before it takes law. Start with the numbers.