Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(NCLAT) 1468

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
ASHOK BHUSHAN, J
Amit Jain – Appellant
Versus
IDBI Trusteeship Services Ltd. – Respondent
Company Appeal (AT) (Insolvency) No. 1186 of 2025 | Company Appeal (AT) (Insolvency) No. 1254 of 2025 | Company Appeal (AT) (Insolvency) No. 1258 of 2025 | Company Appeal (AT) (Insolvency) No. 1314 of 2025

Advocates:
For the Appellants/Petitioners:Mr. Abhijeet Sinha Sr. Advocate, Mr. Gaurav Mitra, Mr. Gaurav H. Sethi, Mr. Anmol Joshi, Mr. Rahul Kapoor, Mr. Rahul Panwar, Mr. Ashim Sood, Mr. Varun Kalra, Mr. Ekansh Gupta, Mr. Gopal Jain, Mr. Sanjeev Singh, Mr. Anish Gupta, Ms. Sandipa Bhattacharjee
For the Respondents: Mr. Krishnendu Dutta, Mr. Malak Bhatt, Ms. Neeha Nagpal, Mr. Saahil Bahety, Ms. Somya Saxena, Mr. Sumesh Dhawan, Mr. Aman Sharma, Mr. Shaurya, Mr. Sujoy Datta, Mr. Jasjeet Singh, Mr. Shubham Raghuwanshi, Mr. Harsha Gollamudi, Mr. Varad Dwevedi, Mrs. Pratima Singh

The court established that insolvency processes for real estate should be project-specific, protecting homebuyers and ensuring fair treatment of creditors.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 7 and various judicial precedents regarding project-specific insolvency.

(B) The court emphasized that resolution of real-estate insolvency should be conducted on a project-specific basis to protect genuine homebuyers and assets.

(C) In this case, admission of the CIRP against the corporate debtor was challenged, arguing that the process should be confined to the specific project due to ongoing financial commitments and various homebuyers.

(D) The main issues included whether the CIRP could proceed against all projects or should be limited to the specific project that was financed. (E) The court ruled that the admission order was set aside and ordered that the Section 7 petition must be reconsidered. (F) The result was that the order dated 05.08.2025 was set aside, and the petition was revived for fresh consideration with additional opportunities for all parties to submit their claims and details. (G) The parties involved included a suspended director, various financial creditors, and homebuyers represented by a social welfare society. (H) There were various dissenting opinions among homebuyers on whether to continue the CIRP or limit it to a project-based approach.

Table of Content
1. appeals against nclt's order and representation by parties. (Para 1 , 2)
2. background on mahagun (india) pvt. ltd.'s financial situation and petitions. (Para 3 , 4 , 5 , 6)
3. details of ongoing projects and their financial implications. (Para 7 , 8 , 9)
4. homebuyers' interests and implications of the cirp on multiple projects. (Para 10 , 11 , 12)
5. judicial precedents supporting project-specific resolutions. (Para 13 , 14 , 15 , 16)
6. homebuyers' rights and appeal requests regarding cirp processes. (Para 17 , 18 , 19 , 20)
7. court's analysis on procedural fairness in cirp. (Para 21 , 22)
8. final observations on project-wise insolvency resolutions. (Para 23 , 24)
9. specific orders detailing procedural directions for fresh consideration. (Para 25 , 26)
10. court's decisions on the appeals and future proceedings. (Para 27 , 28)

JUDGMENT

ASHOK BHUSHAN, J.

All these Appeal(s) (except Company Appeal No.1254 of 2025) have been filed against the same order dated 05.08.2025 passed by National Company Law Tribunal, New Delhi, Court-III in IB-112(ND)/2025. By the impugned order, the Adjudicating Authority has admitted Section 7 petition filed by IDBI Trusteeship Services Ltd. against the Corporate Debtor (“CD”) - Mahagun (India) Pvt. Ltd. Aggrieved by the above order, these Appeal(s) have been filed.

2. Company Appeal (AT) (Ins.) No.1186 of 2025 has been filed by Amit Jain, Suspended Director of the CD praying for setting aside the impugned order with other prayers, which we shall notice hereinafter. Company Appeal (AT) (Ins.) No.1314 of 2025 has been filed by Manorialle Social Welfare Society, a Registered Society representing 195 homebuyers of the residential project – “Mahagun Manorialle” situated in Sector-128, Noida. The Appellant Manorialle Social Welfare Society also aggrieved by the order and has sought directions that Corporate Insolvency Resolution Process (“CIRP”) order passed by NCLT be confined only to the project - Mahagun Manorialle or in alternative it has been prayed that in event CIRP continued vide order dated 05.08.2025, it shall continue project- wise separately for each project. Company Appeal (AT) (Ins.) No.1254 of 2025 has been filed by Aditya Birla Capital Ltd., who claimed to be Financial Creditor of four real estate and commercial project across Delhi and NCR namely – Mahagun Metro Mall, Hotel Sarovar Portico, Mahagun Montage and Hotel Park Plaza, which are exclusively mortgaged to Aditya Birla Capital Ltd. Aditya Birla Capital Ltd. had filed IA No.53 of 2025 on 29.07.2025 before the Adjudicating Authority praying for intervention, highlighting the basic nature of its secured assets and urging that if CIRP were to be initiated it ought to be only with regard to the defaulting project. Vide order dated 04.08.2025, IA No.53 of 2025 was rejected by the Adjudicating Authority. Company Appeal (AT) (Ins.) No.1258 of 2025 has been filed by Aditya Birla Capital Ltd. challenging the order dated 05.08.2025, by which CIRP has been initiated against the CD. The Appellant in the Appeal has prayed for direction that CIRP, if at all maintainable, be limited strictly to the defaulting project, which is subject matter of default under the Company Petition filed by IDBI Trusteeship Services Ltd.

3. Brief background facts giving rise to these Appeal(s) are:

(i) Mahagun (India) Pvt. Ltd. is a real-estate company, incorporated in the year 1995 and primarily engaged in the real-estate business. In December 2020, the CD sought financial assistance from Asia Real Estate II India Opportunity Trust (“Debenture Holder”) by issuance of secured, senior, unrated, unlisted, redeemable, transferable, non-convertible debentures (“NCD”) of face value of Rs.10,00,000 each, aggregating upto Rs.355 crores. The Debentures were to be redeemed from 31.12.2022 to 31.12.2025.

(ii) The CD committed default on redemption of Debentures on 30.09.2023. The IDBI Trusteeship Services Ltd. (“Financial Creditor”) issued recall/ default notice on 20.0

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