Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(NCLAT) 4

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
NARESH SALECHA, Judicial Member
SGN Universal Construction Company Private Limited – Appellant
Versus
Shailendra Kumar Singh – Respondent
Comp. App. (AT) (Ins) No. 2207 of 2024

Advocates:
For the Appellants/Petitioners: Krishnendu Datta, Gaurav Mitra, Aakashi Lodha, Sanjeevi Seshadi, Aishwarya Modi Seth, Nishtha Jindal
For the Respondents: Kunal Tandon, Amit Singh, Gauram Singhal, Rajat Chaudhary, Anjali Maurya, Suraksha Mandhya, Adarsh Nair, Neeraj Malhotra, Abhishek Anand, Karan Kohli, Palak Kalra, Rajat Gupta, Abhyuday D, Shailendra Singh

Development rights constitute IBC 'assets'; AA may include disputed tower units for real estate Section 7 threshold in integrated projects; tentative observations on agreements permissible at admission sans prejudice; Section 238/14 override arbitration; RP verifies claims post-CIRP.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 3(27), 7, 14, 18(f), 25(2)(a), 61, 238 - Real estate project - Development rights over specific tower transferred to contractor via agreement - Homebuyers (allottees of other towers) filed Section 7 petition meeting threshold (40 allottees representing 356 units across towers) - Appellant (contractor) sought to place interim arbitration orders on record via IA, without challenging CIRP admission or claiming exclusion of tower - AA admitted CIRP, included tower units for threshold calculation, made observations on development agreement timing/post-default nature, affirmed Section 238 override over arbitration - Arbitration terminated due to Section 14 moratorium - Development rights constitute “property”/“assets” under Section 3(27)/18(f) per Supreme Court ratio - RP to take custody/control; claims to be filed before RP - Observations in AA order tentative, no prejudice as no merits adjudication/merits not agitated - Threshold verification requires considering total project units where indivisible - Integrated project (common infrastructure) under single registration precludes standalone tower exclusion at admission stage. (Paras 50-67)

(B) Arbitration and Conciliation Act, 1996 - Section 17 - Interim orders (restraining third-party rights creation in tower) are in personam, tentative; do not bind in rem CIRP or override Section 238/14 moratorium - Parallel arbitration halts upon CIRP commencement; sole arbitrator terminated proceedings. (Paras 60-62)

(C) RERA - Single project registration confirms towers as integrated unit with shared infrastructure (clubhouse, utilities); promoter obligations persist. (Paras 57-58)

Facts of the case:
Homebuyers of towers 3/4 initiated Section 7 against corporate debtor for project comprising towers 3,4,5 under single registration due to possession default. Contractor (appellant), holding development rights over tower 5 per 2017 agreement/addendum/power of attorney (allegedly terminated 2022), filed IA to note Delhi HC/arbitral interim orders protecting its rights, without opposing CIRP or seeking exclusion. AA admitted petition, included tower 5 units for threshold, observed agreement suspicious. Appeal challenged only specific adverse observations (paras 6.1,6.7-6.13).

Findings of Court:
No error in impugned order; observations tentative/non-adjudicatory, made in homebuyers' interest/context; CIRP admission proper; tower 5 integral asset; RP to verify claims/rights post-admission; no interference warranted.

Issues: Whether AA erred in (i) including tower 5 units for Section 7 threshold; (ii) making adverse observations on development agreement without hearing/merits; (iii) overriding binding HC/arbitral orders via Section 238.

Ratio Decidendi: AA's role at admission limited to debt/default/threshold; observations incidental, non-binding; development rights = assets subject to RP control under Sections 18/25; Section 238/14 prevail over arbitration; integrated project demands holistic threshold assessment; appellant's limited IA prayer granted (facts noted); ownership disputes for RP/CoC/AA post-CIRP, not admission stage.

Result: Appeal dismissed.

Table of Content
1. appellant's development rights over tower 5 via agreements and court orders. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14)
2. respondents deny rights; tower 5 integral to project under rera. (Para 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26)
3. rp asserts code overrides; tower 5 assets post-termination. (Para 27 , 28 , 29 , 30 , 31 , 32 , 33 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42 , 43 , 44 , 45 , 46 , 47 , 48 , 49)
4. development rights constitute property under ibc sections 3(27), 18(f). (Para 50 , 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63)
5. no error in impugned order; claims for rp determination. (Para 64 , 65 , 66 , 67)

JUDGEMENT

(30.03.2026)

NARESH SALECHA, MEMBER (TECHNICAL)

1. The present appeal has been filed by the Appellant i.e., SGN Universal Construction Company Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016 (‘Code’) against the Impugned Order dated 19.11.2024 passed by the National Company Law Tribunal, New Delhi, Court -IV (‘Adjudicating Authority’) in CP No. (IB) – 62(ND) / 2024.

Shailendra Kumar Singh and others, who are homebuyers, are Respondent No.1 to 40 herein.

M/s Morpheus Prodevelopers Pvt Ltd, who is the Corporate Debtor through Interim Resolution Professional, Mr. Shailendra Singh, is the Respondent No.41 herein.

2. The Appellant submitted that the project “Morpheus Bluebell” at Plot No. GH-04, Sector-04, Greater Noida (West), comprised inter alia Towers 3 and 4 being developed by the Corporate Debtor i.e. M/s Morpheus Prodevelopers Pvt. Ltd., and Tower 5 being developed exclusively by the Appellant, pursuant to contractual arrangements commencing around 03.05.2014. The Appellant contended that by February 2017, a sum of Rs. 6.92 crores were outstanding from the Corporate Debtor to the Appellant towards construction work, whereupon, in discharge of this existing liability, the Corporate Debtor agreed to confer upon the Appellant all construction, development and alienation rights in Tower 5 for a total consideration of Rs. 7,62,30,333, culminating in execution of a Development Rights Agreement dated 22.02.2017 granting the Appellant extensive, irrevocable, absolute and exclusive rights over Tower 5, including the right to collect and retain all sale/sub-lease/license/transfer proceeds of units in Tower 5.

3. The Appellant submitted that in furtherance of the Development Rights Agreement, the Corporate Debtor executed a registered Power of Attorney dated 16.03.2017 in favour of the Appellant, and subsequently, by Addendum dated 15.10.2020, transferred to the Appellant additional FSI of 18,000 sq. ft. accruing to Tower 5 as a green project, thereby reinforcing that Tower 5, in its entirety (including the additional FSI), stood vested in the Appellant for all practical purposes. The Appellant stated that between 2019 and 2022 it expended around Rs. 11 crores and completed approximately 80–85% of the construction of 17 floors of Tower 5, while the Corporate Debtor failed to perform its obligations regarding common areas and to procure a separate RERA registration for Tower 5 in the name of the Appellant, and instead, in collusion with third parties, started exerting pressure on the Appellant to fund Towers 3 and 4, giving rise to disputes between the parties.

4. The Appellant submitted that despite its exclusive rights in Tower 5, the Corporate Debtor, in proceedings initiated by homebuyers of Towers 3 and 4 under Section 8 of the U.P. RERA Act, 2016, made representations dated 12.04.2022 and 16.09.2022 before UPRERA, falsely showing unsold inventory in Tower 5 as a funding source available with the Corporate Debtor for completion of the project, thereby misrepresenting and jeopardising the Appellant’s rights. The Appellant further submitted that, to counter such misrepresentations, it was constrained to issue a public notice in September 2022 asserting its extensive rights in Tower 5, yet the Corporate Debtor cont

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2026 Supreme(Online)(NCLAT) 4

NATIONAL COMPANY LAW APPELLATE TRIBUNALNARESH SALECHA, Judicial MemberSGN Universal Construction Company Private Limited – AppellantVersusShailendra Kumar Singh – RespondentComp. App. (AT) (Ins) No. 2207 of 2024

Development rights constitute IBC 'assets'; AA may include disputed tower units for real estate Section 7 threshold in integrated projects; tentative observations on agreements permissible at admission sans prejudice; Section 238/14 override arbitration; RP verifies claims post-CIRP.

Cases Referred (5)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
NARESH SALECHA, Judicial Member
SGN Universal Construction Company Private Limited – Appellant
Versus
Shailendra Kumar Singh – Respondent
Comp. App. (AT) (Ins) No. 2207 of 2024