Case Law Analysis
|National Company Law Appellate Tribunal
RERA Section 70% Fund Protection | Operational Creditors Cannot Bypass CIRP to Claim Direct Access to Escrow: NCLAT
The NCLAT has clarified that operational creditors, even with admitted claims under the IBC, cannot invoke RERA’s statutory trust provisions to extract funds from the project’s 70% escrow account during corporate insolvency. This upholds the hierarchy of the IBC framework, ensuring resolution plans - not piecemeal claims - govern asset distribution, protecting homebuyers and the integrity of the insolvency process.