2026 Supreme(Online)(NCLAT) 536

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Ashok Bhushan (Chairperson) , Mr. Barun Mitra (Member (Technical)) ,
ISHAN SINGH – Appellant
Versus
MR. NARENDER KUMAR SHARMA RESOLUTION PROFESSIONAL OF SP AZE TOWERS PRIVATE LIMITED – Respondent
1107/ND/2025 COMPANY APPEAL(AT)(INS)

A landowner cannot seek exclusion of project assets from the Corporate Debtor's valuation during CIRP where the Collaboration Agreement is treated as continuing by a statutory authority and the claim of termination is refused by the arbitral tribunal.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 14 - Moratorium - Whether assets forming part of a real estate project undertaken under a Collaboration Agreement can be excluded from the valuation of the Corporate Debtor and Information Memorandum during CIRP when the Collaboration Agreement is claimed to be terminated - The protection under Section 14 is intended to preserve the existing value of the corporate debtor's estate, not to resurrect lapsed or extinguished interests - However, where the Collaboration Agreement was treated as continuing by the statutory authority (RERA) and the prayer for declaration of its lawful termination was refused by the Arbitral Tribunal, the unsold inventory in the project cannot be excluded from the assets of the Corporate Debtor. (Paras 23, 26, 27)

(B) Arbitration and Conciliation Act, 1996 - Sections 34 and 37 - Arbitral Award - Effect of award holding Collaboration Agreement inoperative - The award's refusal to declare the agreement lawfully terminated, coupled with its rejection of the land owner's prayer for restoration of the project land, precludes the contention that the project assets are not part of the Corporate Debtor's estate. (Paras 14, 15, 18)

(C) Real Estate (Regulation and Development) Act, 2016 - Rights of allottees - The statutory rights of homebuyers cannot be defeated by inter-se disputes between the land owner and developer - The RERA authority's direction to complete the project under a subsisting Collaboration Agreement reinforces that the agreement was not terminated. (Paras 9, 10, 11)

Facts of the case:
The Appellant, a land owner, entered into a Collaboration Agreement with the Corporate Debtor for development of a commercial project. The Corporate Debtor allotted units to 147 allottees. The Appellant issued notices cancelling the Powers of Attorney in favour of the Corporate Debtor. An Arbitral Tribunal held the Collaboration Agreement inoperative but refused to declare it lawfully terminated and rejected the Appellant's prayer for restoration of the project land. The CIRP of the Corporate Debtor was initiated on a petition by allottees. The Appellant sought exclusion of the unsold inventory in the project from the valuation of the Corporate Debtor and the Information Memorandum, which was rejected by the Adjudicating Authority.

Findings of Court:
The Appellate Tribunal upheld the rejection, holding that the RERA authority had treated the Collaboration Agreement as continuing and directed both parties to complete the project. The Arbitral Tribunal's refusal to declare the agreement lawfully terminated, and its rejection of the Appellant's prayer for restoration of the land, militated against the Appellant's claim. The assets of the project, including unsold inventory, could not be excluded from the Corporate Debtor's assets during CIRP.

Issues: Whether the unsold inventory in the project can be excluded from the assets of the Corporate Debtor and Information Memorandum during CIRP when the Collaboration Agreement is claimed to be terminated.

Ratio Decidendi: The court ruled that where a Collaboration Agreement is treated as subsisting by the statutory authority and the claim of its termination has been refused by the Arbitral Tribunal, the assets of the project, including unsold inventory, remain part of the Corporate Debtor's estate and cannot be excluded from valuation or the Information Memorandum during CIRP.

Result: Appeal dismissed. Order of the Adjudicating Authority rejecting IA 438/2025 upheld. Parties: Appellant-Is versus Respondent-Resolution Professional of the Corporate Debtor. Dissenting Opinions: None.