NCLAT upheld "development rights" as the Corporate Debtor's property and asserted its jurisdiction over possession disputes during the CIRP.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Technical Member Mr. Barun Mitra, reviewed multiple appeals and held that development rights constitute "property" under Section 3(27) of the Insolvency and Bankruptcy Code (IBC). The tribunal clarified that the Resolution Professional (RP) is empowered under Sections 18 and 25 of the IBC to secure and maintain possession of such assets during the Corporate Insolvency Resolution Process (CIRP). It further held that disputes over possession of assets integral to the CIRP fall exclusively within the jurisdiction of the NCLT and NCLAT, not Civil Courts.
The judgment delivered by the National Company Law Appellate Tribunal (NCLAT) addressed critical disputes arising from the Corporate Insolvency Resolution Process (CIRP) of M/s. Today Homes and Infrastructure Pvt. Ltd. The appeals pertained to possession and development rights over 10.81 acres of land tied to the "Canary Greens" housing project and other related land parcels. Central to the case was whether the Resolution Professional (RP) held valid development rights and physical possession of the land and whether disputes concerning possession fell within the jurisdiction of the insolvency framework or required adjudication by a Civil Court.
The appeals challenged prior orders of the Adjudicating Authority (NCLT, New Delhi, Court III), which had refrained from deciding possession-related issues, holding that such matters required Civil Court intervention. The NCLAT, however, scrutinized the Development Agreement of 2007, subsequent agreements, and arbitration awards, concluding that the development rights claimed by the Corporate Debtor constituted "property" under Section 3(27) of the Insolvency and Bankruptcy Code, 2016 (IBC). It emphasized that the RP was entitled to secure possession of these assets under Sections 18 and 25 of the IBC.
The NCLAT found errors in the Adjudicating Authority's reliance on its earlier order dated 05.12.2023, which had already been set aside in related appeals. It clarified that possession disputes concerning assets integral to the CIRP fall within the jurisdiction of the NCLT and NCLAT, rejecting the argument that these issues necessitated Civil Court intervention. Substantial evidence, including agreements, a General Power of Attorney, and arbitral awards, was presented to establish the Corporate Debtor's development rights and possession over the land.
Consequently, the NCLAT set aside the impugned orders and allowed applications filed by the RP to secure possession of the land. It dismissed applications filed by landowners seeking exclusion of the land from CIRP, affirming that the land was rightfully included in the Resolution Plan. The tribunal's decision underscored the RP's authority to protect and administer assets classified as "property" under the IBC, reiterating the comprehensive jurisdiction of insolvency forums in disputes involving development rights.
The judgment resolved the appeals by restoring the RP’s applications, affirming the inclusion of the disputed land in the CIRP, and providing clarity on jurisdictional boundaries within the insolvency framework. No costs were imposed on the parties.
Mr. Ramji Srinivasan, Sr. Advocate with Mr. Kanishk Khetan, Mr. Ashu Kansal, and Mr. Shivam Jaiswal, Advocates, represented the Appellants.
Mr. Nilesh Sharma, Resolution Professional (RP), appeared in person.
Mr. Sandeep Bajaj and Mr. Naman Tandon, Advocates, appeared for Respondent Nos. 1 to 3.
Mr. Abhinav Vashisth, Senior Advocate, along with Ms. Vatsala Kak, Advocate, appeared for Respondent No. 5.
Mr. Nipun Gautam, Advocate, appeared for the Successful Resolution Applicant (SRA).
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