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2026 Supreme(Online)(NCLT) 3337
NATIONAL COMPANY LAW TRIBUNAL
Khetrabasi Biswal, Judicial Member, Shishir Agarwal, Technical Member
Sandeep Kumar – Appellant
Versus
Chandigarh Overseas Pvt. Ltd. – Respondent
I.A. No.2479 of 2023|CP(IB) No. 248/Chd/Chd/2019
Important Points
Subject
Insolvency Law - Corporate Insolvency Resolution Process
Act Referred
Headnote
(B) Insolvency and Bankruptcy Code, 2016 - Section 30 - Resolution Plan - Approval process - Claims of third parties - Where a resolution plan is under consideration, permitting the exclusion of disputed property would unsettle the resolution process - Resolution applicant steps into the shoes of the corporate debtor with open eyes concerning pending litigation - Resolution plan constitutes a clean slate, but pending civil litigation concerning ownership of specific assets must proceed unhindered (Paras 13, 14, 15).
(C) Insolvency and Bankruptcy Code, 2016 - Claims - Admission of - Notional value - Resolution professional is justified in admitting disputed claims at a notional value when rights are contingent upon the outcome of pending civil proceedings (Paras 16, 17).
Facts of the case:
The applicants invested in a real estate project and entered into an agreement to sell for a portion of the project land. Due to the failure to execute a registered sale deed despite full consideration, the applicants filed a civil suit for specific performance. While the suit was pending, the insolvency resolution process was initiated against the developer. The applicants sought to exclude the subject land from the insolvency estate, while the resolution professional included it in the information memorandum and admitted the applicants' claim at a notional value.
Findings of Court:
The court held that the summary nature of insolvency proceedings precludes the adjudication of complex property title disputes. Since the successful resolution applicant submitted the plan with full knowledge of the pending litigation and the subject land is an integral part of the project, the relief of exclusion cannot be granted. The resolution plan is binding, and the applicants' rights must be pursued through the pending civil litigation.
Issues: Whether the Adjudicating Authority has jurisdiction to exclude assets from the insolvency estate when title is sub-judice; and whether the admission of a contingent claim at a notional value is legally valid.
Ratio Decidendi: The Adjudicating Authority lacks jurisdiction to adjudicate proprietary title disputes and must defer to competent civil courts. The resolution process mandates that claims be filed with the professional, and admitting disputed claims at a notional value is a valid procedural necessity to maintain the integrity and timeline of the insolvency resolution framework.
Result: Application dismissed.
For the Appellants/Petitioners: Anand Chhibbar, Ashwani Sharma, Swati Vashisth
For the Respondents: Atul V. Sood, Rohan Sood, Arora Vishwas Kumar
| Table of Content |
|---|
| 1. summary of facts regarding the alleged property interest dispute. (Para 1 , 2) |
| 2. parties' contentions regarding property ownership and cirp claims. (Para 3 , 4 , 5) |
| 3. nclt lacks jurisdiction for pending property title disputes. (Para 6 , 7 , 8 , 9 , 10 , 11) |
| 4. resolution applicant assumes risk of pending litigation outcomes. (Para 12 , 13 , 14 , 15) |
| 5. notional claim admission at re. 1/- is procedurally valid. (Para 16 , 17 , 18) |
ORDER
1. The present Application has been filed by the Applicants, namely Sandeep Kumar, Poonam Nirankari and Naveen Bansal, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 ("Code"), read with Rule 11 of the National Company Law Tribunal Rules, 2016, for, inter alia, seeking:
“(i) A direction to the Resolution Professional to exclude the land parcel situated at Village Lakhnour, Sector-90, Mohali, admeasuring 15 Kanal 16 Marla comprised in Khasra Nos. 13//6/1(4-18), 6/2(3-2) and 7(7-16) as per Jamabandi 1998-99 ("Subject Land"), from the inventory of assets of the Corporate Debtor, the Information Memorandum and the Resolution Plan, till the decision of the civil suit pending between the Applicants and the Corporate Debtor before the Ld. Civil Courts at Mohali;”
BRIEF FACTS
2. The brief facts of the case, as stated by the Applicants, are summarised as follows:
(i) The Corporate Debtor was incorporated on 22.04.2004, under the erstwhile Companies Act, having its registered office at S.C.O. 196-197, 4th Floor (Top Floor), Sector 34-A, Chandigarh - 160022, with the main object of developing a real estate project styled "Industrial Knowledge (Fashion Technology) Park" ("Project") on 13.75 acres of land at Sector-90, Mohali, SAS Nagar, Punjab. The Government of Punjab issued an Eligibility Certificate dated 18.01.2005 under the Industrial Policy 2003. Subsequently, vide Notification dated 04.02.2005, the Department of Housing and Urban Development granted a Change of Land Use (CLU) for the 13.75-acre land parcel, officially converting its permitted classification from its prior existing use to an "industrial" use.
(ii) In 2004-05, the Corporate Debtor approached the Applicants seeking investment in the Project. Pursuant thereto, the Applicants paid a sum of Rs. 25,00,000/- (Rupees twenty five lakhs only) to the Corporate Debtor vide Agreement to Sell dated 01.01.2005, against which the Corporate Debtor promised delivery of residential flats, commercial booths/showrooms and industrial plots within six months. In 2006, the Corporate Debtor took additional investment of Rs. 10,62,500/- from the Applicants on the same terms. Despite the passage of over 42 months, no meaningful construction was undertaken.
(iii) The Applicants thereafter sought a refund of their investment along with applicable interest. The Corporate Debtor, instead of refunding, offered to execute a Sale Agreement (Full and Final) in respect of the Subject Land measuring 15 Kanal 16 Marla in favour of the Applicants, with a request that registration of the sale deed be deferred till completion of the Project, for which a further period of 5 years was sought (i.e., till 31.07.2013). It was agreed that, in the event of a breach of this condition, the Applicants would be at liberty to have the sale deed independently registered. Accordingly, a Sale Agreement (Full and Final) dated 21.07.2008 was executed at Chandigarh, whereunder the Corporate Debtor transferred rights, title and interest in the Subject Land in favour of the Applicants, delivered physical possession thereof, and received the full and final sale consideration of Rs. 35,62,500/-.
(iv) The Corporate Debtor failed to honour its commitment and did not execute the registered sale deed even after 31.07.2013. The Applicants issued legal notices dated 06.10.2014 and 12.11.2015 calling upon the Corporate Debtor to appear before the Sub-Registrar for registration, but the Corporate Debtor failed to comply on both occasions.
(v) The Applicants being
