If your builder is in liquidation after a failed insolvency process, a flat the company had already handed over to you stays out of the sale, while a flat you never got possession of is part of what the liquidator sells, and for it you hold a money claim paid in the order that section 53 of the Insolvency and Bankruptcy Code, 2016 sets. If you filed that claim during the insolvency process, you do not file it again: the Insolvency and Bankruptcy Code (Amendment) Act, 2026, in force on this point from 26 May 2026, omitted sections 38 to 42, and verified claims are carried forward. If you never filed, you have fourteen days from the liquidation commencement date. And the new one-time restoration under section 33(1A) is considered only before a liquidation order is passed, so after the order the way back is an appeal within thirty days.
Part of the RERA and homebuyer disputes practice at S Jain & Attorneys, Bangalore.
This page is for a homebuyer in Bengaluru whose builder's insolvency process ended in a liquidation order passed by the National Company Law Tribunal after 26 May 2026. If the builder is still in the process, see our guide to possession and registration during the insolvency, and if a plan was approved and cuts your refund, see challenging an approved resolution plan.
Where you stand on the day of the liquidation order, and what to do next:
| Your position | What the law now does | What to do, and by when |
|---|---|---|
| The company handed the flat over to you before the order | Regulation 46A keeps it out of the liquidation estate | Send the liquidator your possession letter and handover record, and update your claim for what is still owed |
| You never got possession | The flat is part of the estate if the company owns it, and is sold with the committee's approval | Follow the committee through your authorised representative |
| Your claim was verified during the insolvency process | Carried forward as on the insolvency commencement date, not verified again | Check the list of stakeholders and report anything paid to you since |
| You filed, but the claim was never verified | The liquidator verifies it within seven days of the liquidation commencement date | Expect his decision, with reasons, within the next seven days |
| You never filed a claim | Regulation 16(1) allows a claim within fourteen days of the liquidation commencement date | File Form CA with the liquidator now, proved as on the insolvency commencement date |
| The liquidation began on or before 26 May 2026 | The old sections 38 to 42 still govern claims in that process | Watch the fourteen days under section 42 to appeal against the liquidator's decision |
Is my flat gone now that my builder is in liquidation?
It depends on one fact: whether the company gave you possession before the order. Section 36 of the Code has the liquidator form a liquidation estate of the company's assets, held as a fiduciary for all the creditors, and section 36(4)(e) lets the Insolvency and Bankruptcy Board of India specify assets that stay outside it. Regulation 46A of the Liquidation Process Regulations, in force since 12 February 2024, does exactly that: wherever the corporate debtor has given possession to an allottee in a real estate project, that asset does not form part of the liquidation estate. The 2026 amendments did not touch it.
A flat you never got possession of has no such protection. If it is the company's asset, it falls within the estate the liquidator realises, and your agreement for sale is answered by your claim. The handover route of the insolvency process, regulation 4E of the process regulations, ended with that process, as our guide on possession during the insolvency warns.
If you live in the flat but the sale deed was never registered, ask the liquidator in writing to complete the conveyance, because section 34(2) vests in him all the powers of the board of directors once he is appointed. If he refuses, the question is one for the tribunal under section 60(5), which covers any question of law or facts arising out of or in relation to the liquidation proceedings.
Key takeaway. In a builder's liquidation the dividing line for the flat is possession, not payment. A flat handed over before the order stays out of the estate under regulation 46A. A fully paid flat that was never handed over goes into the estate, and what you have for it is your claim.
Do I have to file my claim again with the liquidator?
No, if you filed it during the insolvency process. Section 25 of the Amendment Act omitted sections 38 to 42 of the Code, under which a buyer could lodge or update the claim with the liquidator within thirty days of the order and appeal his decision within fourteen days. Section 35(1)(a) now has the liquidator keep an updated list of creditors' claims, as the Board's regulations specify. Both are in force from 26 May 2026 under notification S.O. 2625(E) of 22 May 2026.
The Board's Fourth Amendment Regulations, in force from 2 June 2026, then rewrote the claims chapter. The liquidator's public announcement no longer calls for claims. Regulation 30(2) has him verify, within seven days of the liquidation commencement date, any claim received but not verified during the insolvency process, and its proviso bars a second verification of a claim already verified.
What you must still do is keep the claim accurate. Regulation 16(3) requires a stakeholder to update its claim as and when it is satisfied, partly or fully, from any source, after the insolvency commencement date.
Common mistake. Recalculating the claim with interest up to the liquidation order and filing it again. A verified claim is carried forward as on the insolvency commencement date, and the liquidator does not verify it a second time. What he needs from you is an update for anything received since, under regulation 16(3).
Four things change on the day the order is passed.
Possession decides the flat
Regulation 46A keeps a flat the company handed over to an allottee out of the liquidation estate. A flat never handed over is part of what the liquidator sells.
No second claim
Since 26 May 2026 sections 38 to 42 are omitted. A claim verified during the insolvency process is carried forward and the liquidator does not verify it again.
Fourteen days if unfiled
A buyer who never filed in the insolvency process must submit the claim within fourteen days of the liquidation commencement date under regulation 16(1).
Restoration now shut
Section 33(1A) lets the committee seek restoration of the process only before the liquidation order. After the order, the routes are an appeal or a compromise.
I never filed a claim in the insolvency process. Is it too late?
Not if you act within fourteen days of the liquidation commencement date. Regulation 16(1), as amended from 2 June 2026, says that a person claiming to be a stakeholder shall submit its claim, where it was not submitted during the corporate insolvency resolution process as on the insolvency commencement date, within fourteen days of the liquidation commencement date. Regulation 16(2) requires the new claim to be proved as on the insolvency commencement date, the date the process began, not the date of the liquidation order.
An allottee is a financial creditor: the Explanation to section 5(8)(f) of the Code treats money raised from an allottee under a real estate project as having the commercial effect of a borrowing. Regulation 18 requires a financial creditor's proof of claim to reach the liquidator by electronic means, and the Board's circular of 2 June 2026 lets stakeholders use the corresponding claim forms notified for the insolvency process, reading the liquidator wherever a form says resolution professional. For an allottee, a financial creditor in a class, the corresponding form is Form CA, with the agreement, every receipt, the bank statements and any K-RERA order attached.
Under regulation 30 the liquidator must verify a new claim within seven days of receiving it and communicate his decision, with reasons, within seven days after that. The list of stakeholders goes to the tribunal within thirty days of the last date for receipt of claims under regulation 31(2), and onto the Board's electronic platform under regulation 31(5).
Deadline warning. The fourteen days run from the liquidation commencement date, which the liquidator's public announcement gives as the date the tribunal passed the liquidation order, and the announcement may appear up to five days after he is appointed. It does not invite claims, and regulation 16 allows nothing after the fourteen days. A buyer who waits for a newspaper notice asking for claims can find most of the fourteen days gone before seeing anything.
The liquidator rejected my claim or admitted less than I paid: what can I do?
Get his reasons, answer them with documents, and if that fails, apply to the tribunal. Regulation 30 requires the liquidator to record his reasons for a rejection in writing and to communicate his decision with reasons within seven days. Answer any call for further evidence under regulation 23 in full, and send what he missed: regulation 31(3), substituted on 22 September 2026, lets him modify an entry in the list of stakeholders on additional information.
What has gone is the dedicated appeal. The fourteen-day appeal under section 42 was omitted with sections 38 to 41. In a liquidation that began after 26 May 2026, the route on our reading is an application to the tribunal under section 60(5), which has jurisdiction over any question of priorities or of law or facts arising out of or in relation to the liquidation proceedings. Section 60(5) states no time limit of its own, but the distribution runs on fixed clocks, so do not wait. If the figure was cut during the insolvency process, the arguments are those in our guide on a claim admitted at less than you paid, because the liquidator will not verify that claim again.
Can the liquidation still be stopped, or the insolvency process restored?
Not through the new restoration route, which closes when the liquidation order is passed. Section 33(1A), inserted by the 2026 Act, requires the tribunal, before passing a liquidation order, to consider an application by the committee of creditors approved by not less than sixty-six percent of the voting share for restoring the process, and lets it restore the process for not more than one hundred and twenty days. Section 33(1B) allows that only once. The Explanation applies the route to processes begun before 26 May 2026 where no liquidation order has been passed, and says it shall not apply where the liquidation order is passed.
Two doors remain. The first is an appeal. Section 61 gives anyone aggrieved by the order thirty days to appeal to the National Company Law Appellate Tribunal, with up to fifteen more for sufficient cause, and section 61(4) allows an appeal against a liquidation order on grounds of material irregularity or fraud committed in relation to it. Section 61(6), in force since 26 May 2026, gives the Appellate Tribunal three months from receipt to decide the appeal. In Lotus City Plot Buyers Welfare Association v Three C Homes, decided on 8 July 2021, the Appellate Tribunal set aside an order that had rejected a resolution plan and sent the company towards liquidation, observing that liquidation is the last resort and that homebuyers are in dire need of their homes, and remanded the matter.
The second is a compromise or arrangement under section 230 of the Companies Act, 2013. Regulation 2B of the Liquidation Process Regulations lets the liquidator file one only where the committee recommended exploring it when it decided to liquidate, not after thirty days from the liquidation commencement date, and since 2 June 2026 only if creditors approved it by the statutory majority and it offers them more than the liquidation value as on the insolvency commencement date.
Who runs the liquidation now, and do we buyers still have a say?
The committee of creditors from the insolvency process now supervises the liquidator, and your authorised representative still votes for your class. Section 21(11) says the committee constituted under section 21 shall also supervise the conduct of the liquidation process by the liquidator, and section 35(2) now says the same. Regulation 8 continues the committee into the liquidation, requires its first meeting within seven days of the liquidation commencement date, and by regulation 8(7) keeps the authorised representative appointed during the process acting for the creditors he represented. The stakeholders' consultation committee, whose advice did not bind the liquidator, was omitted on 2 June 2026.
The committee's word is now approval, not advice. Regulation 8(4) requires its prior approval for, among other things, the liquidator's fees, the liquidation costs and any suit by or against the company, and regulation 8(5) requires sixty-six percent of the voting share for the sale itself, including the manner of sale, the reserve price and the auction process. Under section 34A the committee may, by sixty-six percent, resolve to replace the liquidator. And the liquidator is a new face: section 34(4) bars the resolution professional who ran the process from being appointed, and section 34(5) makes him hand over all its records.
The class's voting strength can move. Under the provisos to regulation 8(1), a secured lender that has not relinquished its security under section 52 is not part of the committee, and a creditor treated as unsecured for the rest of its debt votes only for that remaining part. Section 37(2) lets any creditor require financial information about the company from the liquidator, who under section 37(3) must provide it within seven days or give reasons.
Will the liquidator finish the building, or sell it?
Expect a sale. Regulation 32 now lets the liquidator sell an asset on a standalone basis, the assets in a slump sale, a set of assets collectively, or the assets in parcels. Selling the company or its business as a going concern is no longer on that list: the Board's Second Amendment Regulations of 14 October 2025 omitted both going concern options and regulation 32A, prospectively, for cases where a going concern sale had not commenced. The sale is ordinarily by auction under regulation 33(1), a private sale needs sixty-six percent of the committee and is confined to narrow cases under regulation 33(2), and a clarification added on 2 June 2026 bars a sale to anyone ineligible under section 29A of the Code.
In the auction you are a creditor waiting for proceeds, not a party to the sale. If your group wants the project sold as one set of assets rather than in parcels, argue it in the committee, through your authorised representative, before the manner of sale and the reserve price are approved, or bring an eligible bidder.
Where does my money stand when the proceeds are paid out?
At clause (d) of section 53(1), with the other financial debts owed to unsecured creditors. Ahead of you sit the process and liquidation costs, workmen's dues for twenty-four months together with secured creditors who relinquished their security, and other employees' dues for twelve months. Government dues and the rest come after you. The full ladder, and why a claim filed in the wrong form drops two rungs, is in our guide to Form F and Form CA.
The 2026 Act changed who stands beside you. Its new Explanation to section 53(1)(b)(ii) says that where the security a secured creditor relinquishes is worth less than its debt, it is a secured creditor only to the extent of that value, determined as specified, and an unsecured creditor for the rest, and regulation 8(1) takes that value as the liquidation value under regulation 35. On our reading, the unsecured remainder of a project lender's debt is then a financial debt owed to an unsecured creditor and shares clause (d) with you, paid in equal proportion if the proceeds fall short. A lender that enforces its security itself under section 52 realises that asset for itself, and any shortfall ranks under clause (e)(ii), below you.
The lender must choose quickly. Section 52(2), as substituted, requires a secured creditor that intends to realise its security to tell the liquidator and identify the asset within fourteen days of the liquidation commencement date, failing which the security is deemed relinquished to the estate, and a shared asset can be realised only with the agreement of secured creditors holding sixty-six percent of the value of the claims it secures. Once money comes in, regulation 42(2) requires distribution within fifteen days of receipt.
Can my K-RERA complaint or consumer case go on against the builder?
Not against the company. The insolvency moratorium ends with the liquidation order under section 14(4), but since 26 May 2026 section 33(1)(b)(iv) requires the tribunal, subject to section 52, to declare a moratorium in the liquidation for the purposes of section 14(1)(a) and (c), which bar suits and proceedings against the company, including execution of any decree or order, and action to enforce security interests. The old bar in section 33(5) was omitted at the same time. A K-RERA complaint, a consumer case or a recovery certificate against the company halts there, and the order you hold becomes proof of your claim. Our guide on executing a K-RERA order explains why the recovery machinery gives way once insolvency begins.
Whether a case can go on against the promoters, the directors or a landowner is a separate question, which turns on who each respondent is. Our guide on homebuyer rights when the builder is insolvent takes it up.
Can the promoters be made to put money back into the estate?
Yes, where there were preferential, undervalued or extortionate transactions, or fraudulent or wrongful trading, and the 2026 Act lets creditors raise them directly. Section 66, under which the tribunal may make persons knowingly party to carrying on the business with intent to defraud creditors contribute to the company's assets, now names the liquidator as an applicant. Under section 47, as substituted, where such a transaction or trading has occurred and the liquidator or resolution professional has not reported it, a creditor, alone or jointly with others, may apply to the tribunal, which then passes orders as if the professional had applied, and directs the Board to start disciplinary proceedings if he had the information and did not report it.
What these applications recover during the liquidation goes into the estate for every creditor in the section 53 order, and section 26, as substituted, keeps them alive after the process ends. Read the liquidator's quarterly progress report, which under regulation 15(2)(e) must cover avoidance applications, before your group spends on one of its own.
My builder's liquidation began before 2 June 2026: which rules apply?
It turns on the date of the order. For a liquidation initiated on or before 26 May 2026, the Explanation to section 35(1) says that clauses (a) and (j) as amended, and the omission of sections 38 to 42, do not apply, so claims ran under section 38 and a creditor still has fourteen days under section 42 to appeal against the liquidator's decision accepting or rejecting a claim. The Explanation to section 21(11) brings the committee's supervision, the power to replace the liquidator under section 34A and the new section 35(2) into a liquidation ongoing on that date, if the liquidator had not yet applied for dissolution under section 54. The new section 52(2) does not reach those older liquidations. A liquidation that began between 27 May and 1 June 2026 is governed by the amended Code, but the amended regulations are in force only from 2 June 2026, so its claims deadline is unsettled. File or update the claim at once.
Step by step: the first month after the liquidation order
- Obtain the liquidation order and note its date. It starts your fourteen days if you never filed a claim, and the thirty days to appeal under section 61 run from the day it is pronounced, not from when you obtain it.
- Check your admitted amount in the list of creditors from the insolvency process. If you never filed, send Form CA to the liquidator's e-mail address within the fourteen days, proved as on the insolvency commencement date.
- If the company gave you possession, write to the liquidator citing regulation 46A, with the possession letter and handover record, and ask him to confirm the flat is outside the estate and to complete any pending sale deed.
- Update your claim in writing under regulation 16(3) for anything received since the process began, and keep proof that it reached him.
- Before the committee's first meeting, due within seven days, ask your authorised representative for the agenda, then for the minutes and the voting shares once the lenders' section 52 decisions are in.
- Ask the liquidator under section 37(2) for the financial information you need. He must provide it within seven days or give reasons.
- If the order rests on a material irregularity or fraud, decide with the other buyers within the thirty days whether to appeal, and file jointly.
- Stop any K-RERA execution or recovery step against the company, and keep the orders as proof of your claim.
- Ask for each progress report, which regulation 5(3) makes available to a stakeholder on a written application, costs and a confidentiality undertaking, read the list of stakeholders, and take any wrong entry to the liquidator in writing, then to the tribunal under section 60(5).
How long will it take, and what will it cost?
The rules now aim at six months. For a liquidation that began on or after 2 June 2026, regulation 44 asks the liquidator to liquidate the company within one hundred and eighty days of the liquidation commencement date, and section 54(1), as substituted, asks him to completely liquidate the assets and apply for dissolution within that period, which the tribunal may extend by up to ninety days for sufficient reasons. The model timeline in regulation 47 runs as follows.
| Step | Model timeline from the liquidation commencement date | Where it comes from |
|---|---|---|
| Public announcement | Within five days of the liquidator's appointment | Regulation 12 |
| First committee meeting, and registered valuers appointed where a fresh valuation is needed | Day 7 | Regulations 8 and 35(2) |
| Claims from those who never filed, and secured lenders' decisions | Day 14 | Regulation 16, section 52, regulation 21A |
| Verification of new claims | Day 21 | Regulation 30 |
| Decision on admission or rejection communicated | Day 28 | Regulation 30 |
| List of stakeholders filed with the tribunal | Day 44 | Regulation 31(2) |
| Liquidation completed | Day 180 | Regulation 44 |
Treat those as the regulator's model, not a forecast: land title, lenders' security, pending litigation and failed auctions all add time. Filing or updating a claim costs only the time to prepare it, and regulation 24 makes each claimant bear the cost of proving its own claim. Contested work costs more: an application under section 60(5), or an appeal, is billed by the hearings it needs and runs for months, and buyers who file together split the fees. These are indicative ranges only.
The liquidation now runs on short clocks.
Seven days to meet
The committee of creditors must hold its first meeting in the liquidation within seven days of the liquidation commencement date, and your authorised representative continues to vote for the class.
Fourteen days to choose
A secured lender must tell the liquidator within fourteen days whether it will realise its security itself, failing which the security is deemed relinquished to the estate.
Fifteen days to pay
Regulation 42(2) requires the liquidator to distribute sale proceeds within fifteen days of receiving them, after the process and liquidation costs are deducted.
A 180-day target
Regulation 44 and section 54(1) expect the liquidation to be completed within one hundred and eighty days, which the tribunal may extend by up to ninety days.
Where do buyers go wrong once liquidation is ordered?
The commonest mistake we see is waiting. Buyers who never filed in the insolvency process wait for a notice inviting claims that the current public announcement does not contain, and the fourteen days pass. Buyers who did file send a fresh claim computed to the date of the liquidation order, when the claim is carried forward as on the insolvency commencement date. Buyers handed their flats years ago assume regulation 46A works by itself and never put the possession letter and handover record before the liquidator. Others leave the committee to the lenders and learn of the reserve price from the auction notice. And a K-RERA recovery certificate is pressed against a company in liquidation, which only adds cost. In these files we start from the liquidation order and its date, because most clocks on this page run from it.
Frequently Asked Questions
Do I need to file my claim again now that the builder is in liquidation?
No, if you filed it during the insolvency process. Sections 38 to 42 of the Code were omitted from 26 May 2026, and a claim verified in the process is carried forward and not verified again. Update it under regulation 16(3) if you have received anything since.
I never filed a claim during the insolvency. How long do I have?
Fourteen days from the liquidation commencement date, under regulation 16(1) of the Liquidation Process Regulations as amended from 2 June 2026. Use Form CA, addressed to the liquidator, and prove the claim as on the insolvency commencement date. If the liquidation began between 27 May and 1 June 2026, the deadline is unsettled, so file at once.
I live in the flat but the sale deed was never registered. Can the liquidator sell it?
Not if the company gave you possession before the order, because regulation 46A excludes such a flat from the liquidation estate. Ask the liquidator in writing to complete the conveyance, and take a refusal to the tribunal under section 60(5).
Can our committee of creditors restore the insolvency process now?
Not under section 33(1A). That application is considered before a liquidation order is passed and, by its own Explanation, does not apply once the order is made. What remains is an appeal within thirty days under section 61, on grounds of material irregularity or fraud, or a compromise under section 230 of the Companies Act where the committee recommended exploring one.
Will the liquidator complete the building?
Do not plan on it. Regulation 32 provides for selling assets standalone, by slump sale, collectively or in parcels, and the going concern options were omitted from 14 October 2025. The committee approves the manner of sale and the reserve price by sixty-six percent.
Can I pursue my K-RERA complaint against the builder?
Not against the company. When the tribunal orders liquidation after 26 May 2026, it must also declare a moratorium for the purposes of section 14(1)(a), which halts the complaint and any execution against the company. Keep your order as proof of the claim.
Who speaks for the buyers in the liquidation?
Your authorised representative. Regulation 8(7) continues him in the liquidation, and the committee of creditors, which supervises the liquidator under section 21(11), approves the sale by sixty-six percent of the voting share.
How long will the liquidation take?
Regulation 44 and section 54(1) aim at one hundred and eighty days from the liquidation commencement date, extendable by up to ninety days. Contested land, lenders' security and failed auctions often take longer, so treat that as a target, not a promise.
This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.
