Issues: Whether insolvency proceedings initiated on an operational creditor's application could continue after full settlement of the claim, discharge of the only other creditor's claim, and acknowledgment of a pre-existing dispute.

Analysis: The operational creditor's claim was fully and finally settled and it consented without objection to reversal of the admission order. The record also established that the claim concerning transportation charges had been disputed before issuance of the demand notice, particularly regarding the distance measurements forming the basis of billing. The only claim received during the process, relating to provident-fund dues, had also been paid in full. In these circumstances, there was no subsisting creditor claim requiring continuation of the insolvency process.

Conclusion: The operational creditor's insolvency application could not be sustained, as the debt stood settled and a genuine pre-existing dispute existed before the statutory demand notice.

Issues: (i) Whether appointment of a liquidator without considering the Committee of Creditors' unanimous recommendation was sustainable; (ii) Whether the IBBI communication dated 18.07.2023 justified bypassing the recommended insolvency professional; (iii) Whether the objection concerning the appellant's Authorisation for Assignment could sustain the appointment; (iv) Whether progress by the incumbent liquidator and the asserted absence of creditor objection warranted refusal of relief.

Issue (i): Whether appointment of a liquidator without considering the Committee of Creditors' unanimous recommendation was sustainable.

Analysis: Section 34 of the Insolvency and Bankruptcy Code, 2016 treats continuation of the resolution professional as liquidator as the default, subject to the specified grounds for replacement. The unanimous and repeatedly affirmed recommendation of the sole Committee of Creditors member was material to selection of the liquidator. The impugned order referred to the relevant Committee meeting only for fixation of fees and did not acknowledge or address its recommendation of the appellant.

Conclusion: The appointment made without consideration of the Committee of Creditors' unanimous recommendation was unsustainable, in favour of the appellant.

Issue (ii): Whether the IBBI communication dated 18.07.2023 justified bypassing the recommended insolvency professional.

Analysis: The power under Section 34(4) of the Insolvency and Bankruptcy Code, 2016 permits replacement on grounds relating to a particular resolution professional and cannot be transformed into a general exclusion of erstwhile insolvency resolution professionals from appointment as liquidators. In any event, the communication targeting an outgoing interim resolution professional or resolution professional did not apply because the appellant had never held either office in the corporate debtor.

Conclusion: The communication did not furnish a valid basis for appointing another liquidator in place of the appellant, in favour of the appellant.

Issue (iii): Whether the objection concerning the appellant's Authorisation for Assignment could sustain the appointment.

Analysis: The eligibility objection was not part of the reasoning in the impugned order. The material concerning the appellant's AFA was contested, and the appellate record did not permit a conclusive determination of its validity. Regulation 7A of the IBBI (Insolvency Professionals) Regulations, 2016 nevertheless required verification before the appellant assumed charge.

Conclusion: The AFA objection could not sustain the impugned appointment; the appellant's current AFA must be verified by the Adjudicating Authority before assumption of charge.

Issue (iv): Whether progress by the incumbent liquidator and the asserted absence of creditor objection warranted refusal of relief.

Analysis: The incumbent's actions were routine statutory liquidation steps, while realisation of assets had remained stayed shortly after his appointment. Those acts were neither irreversible nor sufficient to override the sole financial creditor's unequivocal, repeated recommendation of the appellant. The completed steps could be adopted by the incoming liquidator, and the incumbent was entitled to appropriate costs and fees for work genuinely performed.

Conclusion: Neither the progress made nor the asserted absence of objection justified retaining the incumbent liquidator, in favour of the appellant.

Final Conclusion: The liquidator's appointment was required to conform to the unanimously expressed commercial decision of the Committee of Creditors, subject to verification of the proposed liquidator's subsisting regulatory authorisation and preservation of valid steps already undertaken.

Ratio Decidendi: A liquidator cannot be appointed by disregarding a unanimous Committee of Creditors recommendation on the basis of a general communication that is outside the confines of Section 34(4) of the Insolvency and Bankruptcy Code, 2016 or factually inapplicable to the recommended professional.

Issues: Whether a creditor that did not challenge the Resolution Professional's classification of its claim as contingent can challenge the approved resolution plan after its implementation.

Analysis: The creditor was informed during the corporate insolvency resolution process that its claim was categorised as contingent, but did not challenge that determination before the Adjudicating Authority. Its subsequent pursuit of modification of an interim stay before another forum did not displace the need to timely contest the claim classification in the insolvency process. The resolution plan was approved and thereafter fully implemented, with the insolvency proceeding closed. An approved and implemented resolution plan cannot be disturbed by claims not timely agitated, since the successful resolution applicant cannot be exposed to fresh or resurrected claims after plan approval.

Conclusion: The challenge to the resolution plan was not maintainable at the post-implementation stage and was decided against the appellant.

Issues: (i) Whether discounted trade receivables acquired by a bank under a TReDS reverse-factoring arrangement constitute financial debt or operational debt; (ii) Whether the alleged erroneous recording of a concession regarding precedent vitiated the impugned order; (iii) Whether a claim filed in an incorrect category required inclusion in the resolution plan despite the creditor's delayed filing in the correct category; (iv) Whether relief could be granted after approval and full implementation of the resolution plan.

Issue (i): Whether discounted trade receivables acquired by a bank under a TReDS reverse-factoring arrangement constitute financial debt or operational debt.

Analysis: Financial debt under Section 5(8) requires disbursal against consideration for the time value of money. Under the TReDS mechanism, suppliers assigned to the bank their pre-existing receivables arising from goods supplied to the corporate debtor after the bank discounted the invoices and paid the suppliers. No funds were disbursed to, or placed at the disposal of, the corporate debtor. The debtor's obligation remained the trade payable for goods received, merely payable to the assignee rather than the suppliers. The discount and charges for delayed payment were compensation for early realisation of trade receivables, not consideration for an independent loan. An assignment does not transform operational debt into financial debt; the financier steps into the suppliers' position as an operational creditor. The claimant's status as a scheduled commercial bank does not alter the substance of the transaction.

Conclusion: The TReDS reverse-factoring claim is operational debt, not financial debt, and the bank is an operational creditor.

Issue (ii): Whether the alleged erroneous recording of a concession regarding precedent vitiated the impugned order.

Analysis: The classification issue was independently determined on merits and reached the same conclusion as the adjudicating authority. Therefore, even assuming that the alleged concession was incorrectly recorded, it had no effect on the outcome.

Conclusion: The alleged error regarding concession does not vitiate the impugned order.

Issue (iii): Whether a claim filed in an incorrect category required inclusion in the resolution plan despite the creditor's delayed filing in the correct category.

Analysis: The resolution professional classified the claim as operational debt and specifically directed filing in the appropriate form. The creditor instead persisted with its financial-creditor claim and filed the operational-creditor claim only after dismissal of its application and after approval of the plan by the committee of creditors. A verifiable claim cannot be said to have been improperly ignored where the creditor did not timely lodge it in the category identified by the resolution professional.

Conclusion: The delayed operational-creditor claim did not require inclusion in the resolution plan.

Issue (iv): Whether relief could be granted after approval and full implementation of the resolution plan.

Analysis: The resolution plan had been approved, fully implemented, payments made, and the monitoring committee dissolved. Reclassification at that stage would unsettle a completed insolvency resolution process, and no ground within the limited scope for challenging an approved plan was established.

Conclusion: No relief capable of disturbing the completed resolution process can be granted.

Final Conclusion: The classification of the bank's TReDS receivables as operational debt remains undisturbed, and the completed resolution process cannot be reopened on that claim.

Ratio Decidendi: A financier acquiring discounted invoices under a TReDS reverse-factoring arrangement, without disbursing funds to the corporate debtor for the time value of money, acquires assigned operational receivables and does not become a financial creditor.

Issues: (i) Whether the Adjudicating Authority had jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 to determine and protect access to a liquidation asset; (ii) Whether the Corporate Debtor had a subsisting prescriptive right of way over the appellants' adjoining land and whether its obstruction was connected with the liquidation process.

Issue (i): Whether the Adjudicating Authority had jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 to determine and protect access to a liquidation asset.

Analysis: Section 60(5)(c) extends to questions of law or fact arising out of or relating to insolvency or liquidation. The disputed obstruction arose after commencement of CIRP and directly affected inspection, saleability and value realisation of land forming part of the liquidation estate. Protection of an existing access right required for liquidation does not amount to creating a fresh civil right or usurping an exclusive statutory forum's jurisdiction.

Conclusion: The application under Section 60(5)(c) was maintainable, in favour of the Liquidator.

Issue (ii): Whether the Corporate Debtor had a subsisting prescriptive right of way over the appellants' adjoining land and whether its obstruction was connected with the liquidation process.

Analysis: The non-agricultural permission of 1999 recorded access from the National Highway through the adjoining blocks. The access was openly and continuously used for approximately two decades without contemporaneous objection, including after the appellants acquired the servient land. The alternate route crossed third-party land and was not a legally secure access. Satellite imagery and the timing of the obstruction supported the finding that the established access was blocked after CIRP in a manner detrimental to value maximisation.

Conclusion: The Corporate Debtor possessed a subsisting right of way under Section 15 of the Indian Easements Act, 1882, and the obstruction was connected with and prejudicial to liquidation, in favour of the Liquidator.

Dissenting Opinion: Justice N. Seshayee considered that a contested prescriptive easement imposes a burden on third-party property and requires proof of a defined route, adverse user as of right, uninterrupted twenty-year enjoyment, and examination of evidence. Such a civil dispute falls outside the Tribunal's summary jurisdiction and must be pursued before a civil court with leave under Section 33(5) of the Insolvency and Bankruptcy Code, 2016.

Final Conclusion: The existing access was validly protected as integral to effective realisation of the liquidation estate, and consequential measures to keep it unobstructed were sustained.

Ratio Decidendi: Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 permits protection of a pre-existing access right where post-insolvency obstruction has a direct and proximate nexus with liquidation and asset value realisation.

Issues: (i) Whether the appeal was time-barred and whether a clerical rectification of the original order restarted the appellate limitation period; (ii) Whether the Section 9 application was time-barred, including whether the balance confirmations constituted valid acknowledgments extending limitation; (iii) Whether a pre-existing dispute barred initiation of insolvency proceedings under Section 9.

Issue (i): Whether the appeal was time-barred and whether a clerical rectification of the original order restarted the appellate limitation period.

Analysis: Section 61(2) of the Insolvency and Bankruptcy Code, 2016 permits filing within 30 days, with condonation limited to a further 15 days. Limitation runs from pronouncement of the original order. The subsequent order corrected only the date of pronouncement and made no substantive alteration to the findings; hence it did not create a fresh limitation period. Section 60(6) applies to suits and applications by or against a corporate debtor during moratorium and does not extend the period for an appeal under Section 61. Administrative delay in authorising the appeal could not enlarge the statutory outer limit.

Conclusion: The appeal was barred by limitation; the clerical rectification did not restart limitation.

Issue (ii): Whether the Section 9 application was time-barred, including whether the balance confirmations constituted valid acknowledgments extending limitation.

Analysis: Article 137 of the Limitation Act, 1963 applies to a Section 9 application, and limitation runs for three years from the date of default. The admitted default date was 07.03.2015, whereas the application was filed on 23.09.2021. A valid acknowledgment under Section 18 must be written, proved, unequivocal, and made before expiry of the applicable limitation period. The balance confirmations were unproved and reflected materially inconsistent outstanding amounts; together with the creditor's own inconsistent credit-balance communication, they did not establish an unequivocal acknowledgment of an ascertained liability.

Conclusion: The Section 9 application was time-barred and was not saved by a valid acknowledgment of liability.

Issue (iii): Whether a pre-existing dispute barred initiation of insolvency proceedings under Section 9.

Analysis: Correspondence predating the demand notice recorded objections concerning account reconciliation, set-offs and the correctness of ledger figures. These communications disclosed a genuine and continuing dispute concerning the debt claimed, rather than a spurious, hypothetical or illusory defence. The shifting amounts in the balance confirmations reinforced that the debt was not crystallized.

Conclusion: A genuine pre-existing dispute existed, independently rendering the Section 9 application unsustainable.

Final Conclusion: The operational creditor could not invoke the insolvency process for a stale and disputed claim, and the refusal to commence CIRP remained legally sustainable.

Ratio Decidendi: A clerical rectification that does not substantively modify an insolvency order does not reset appellate limitation, and a Section 9 application cannot proceed where the claim is time-barred or subject to a genuine pre-existing dispute.

Issues: Whether the ex parte order could be recalled on the ground of non-service of notice and delayed knowledge of the proceedings.

Analysis: Repeated notices and hearing communications had been sent to the appellants' admitted email address and by speed post. The emails had not bounced, and no material rebutted the presumption of receipt. The record also established service of notices and wilful non-participation in the proceedings. The recall application was filed after about 400 days without cogent explanation; no fraud, misrepresentation, or sufficient cause for non-appearance was established. In time-bound insolvency proceedings, such unexplained delay could not be ignored.

Conclusion: Recall of the ex parte order was rightly refused; the finding is against the appellants.

Issues: (i) Whether the Corporate Debtor was denied a fair opportunity of hearing before admission of the financial creditor's insolvency application. (ii) Whether a pending scheme of compromise and arrangement and ongoing settlement negotiations required deferment of the insolvency application. (iii) Whether pending counterclaims, asserted receivables and commercial viability barred admission upon establishment of financial debt and default.

Issue (i): Whether the Corporate Debtor was denied a fair opportunity of hearing before admission of the financial creditor's insolvency application.

Analysis: The Corporate Debtor had filed pleadings and written submissions and was afforded repeated opportunities to advance oral submissions. Its right to address oral arguments was closed only after it failed to utilise those opportunities, including a further opportunity afforded following a change in Bench composition. The adjudication proceeded on the available pleadings, documents and written submissions rather than ex parte. Fair opportunity does not require indefinite adjournments where a party has adequately participated but fails to argue.

Conclusion: There was no violation of the principles of natural justice and no procedural infirmity in deciding the insolvency application on the record.

Issue (ii): Whether a pending scheme of compromise and arrangement and ongoing settlement negotiations required deferment of the insolvency application.

Analysis: A scheme under Sections 230-232 remains a proposal until approved in accordance with law and made binding. Settlement negotiations and unsuccessful one-time settlement proposals do not create a legal embargo on an insolvency application. The settlement proposal had failed for want of the stipulated upfront payment, and the statutory process could not be kept pending indefinitely upon uncertain future negotiations.

Conclusion: The pending scheme and settlement negotiations did not bar or require postponement of admission of the insolvency application.

Issue (iii): Whether pending counterclaims, asserted receivables and commercial viability barred admission upon establishment of financial debt and default.

Analysis: The jurisdictional enquiry is confined to the existence of financial debt, occurrence of default and completeness of the application. The credit facilities, default, classification of accounts as non-performing assets and acknowledgments through settlement proposals established debt and default. The counterclaim before the debt recovery forum remained undecided and could not displace the established default. Claimed receivables, future arbitral recoveries, commercial viability and business hardship do not override the statutory insolvency framework, which itself provides for resolution while preserving the corporate debtor as a going concern.

Conclusion: Pending counterclaims, prospective recoveries and asserted viability did not preclude admission once financial debt and default were established.

Final Conclusion: The admission of the Corporate Debtor to the corporate insolvency resolution process was legally sustainable, and the connected challenges to the procedural orders furnished no basis for appellate intervention.

Ratio Decidendi: Once financial debt and default are established under Section 7, unapproved compromise proposals, ongoing settlement negotiations, and undecided counterclaims do not ordinarily justify deferral of insolvency admission; adequate repeated opportunities satisfy natural justice even where oral argument is subsequently closed for non-utilisation.

Issues: Whether the application for initiation of insolvency resolution process against the personal guarantor under Section 95 was barred by limitation.

Analysis: The corporate debtor's part-payment on 03.02.2021 was undisputed. Under the deed of guarantee, a part-payment by the borrower bound the guarantor; further, the guarantor's liability was co-extensive with that of the principal borrower. The earlier dismissal of the recovery application for default did not extinguish the underlying debt or make the Section 95 proceeding non-maintainable.

Conclusion: The Section 95 application instituted on 28.09.2023 was within limitation and was maintainable against the personal guarantor.

Issues: Whether gratuity and leave encashment payable to an employee who superannuated during the corporate insolvency resolution process constitute insolvency resolution process costs.

Analysis: Section 5(13) of the Insolvency and Bankruptcy Code, 2016 employs an exhaustive definition of insolvency resolution process costs. Apart from the resolution professional's remuneration, the enumerated categories concern expenses actually incurred by the resolution professional during the insolvency resolution process. Gratuity accrues as a terminal benefit upon cessation of employment and is not an expense incurred by the resolution professional; it is also not equivalent to salary payable for services during the process. Leave encashment likewise cannot be included in insolvency resolution process costs and must be addressed under the resolution-plan framework and payment priority prescribed by the Code.

Conclusion: Gratuity and leave encashment do not form part of insolvency resolution process costs; the issue is decided against the appellant.

Issues: Whether, pending the appeal, suspension of a resolution professional's registration for misconduct alleged in one CIRP could operate across all other assignments without an opportunity of hearing concerning those assignments.

Analysis: The statutory scheme requires Board confirmation for appointment or replacement of a resolution professional, while Regulation 13(7) contemplates communication of disciplinary action to the committees of creditors in other ongoing assignments. The blanket suspension was prima facie disproportionate, undermined the respective committees' statutory role, and affected the appellant's other assignments without a hearing on conduct in those assignments. The appellant established a prima facie case, balance of convenience and irreparable injury. The wider appellate scope under Section 220(7) was left for determination in the main appeal.

Outcome: The suspension was stayed insofar as it barred the appellant from acting in assignments other than the CIRP in which he had been removed; the Board may communicate its order to the respective committees of creditors for their decision.

Issues: (i) Whether the Section 7 application was validly authorised by the partnership firm notwithstanding objections by one surviving partner and the intervention of a deceased partner's legal representative; (ii) Whether the asserted financial debt and default entitled the appellant to initiate insolvency proceedings within limitation.

Issue (i): Whether the Section 7 application was validly authorised by the partnership firm notwithstanding objections by one surviving partner and the intervention of a deceased partner's legal representative.

Analysis: Under the partnership deed, the death of a partner did not dissolve the firm, and a nominee of the deceased partner could join only upon acceptance by the surviving partners. As the legal representative had not been admitted as a partner, he lacked standing to intervene in the insolvency proceeding. Decisions concerning the firm's business could be taken by a majority under the partnership deed and Section 12(c) of the Partnership Act, 1932. The decision of two of the three surviving partners to commence the proceeding was therefore binding. A partner acting in the firm's name could institute the application because each partner is an agent of the firm, and neither Rule 4 nor Form 1 required signatures of every partner. Any challenge to the majority decision lay before the competent civil forum.

Conclusion: The Section 7 application was validly authorised; the objection to its institution fails.

Issue (ii): Whether the asserted financial debt and default entitled the appellant to initiate insolvency proceedings within limitation.

Analysis: The corporate debtor's balance sheets classified the appellant as a sundry creditor, and the ledger and Form 1 showed amounts advanced and repayable by the corporate debtor. Absence of a formal loan agreement or an interest stipulation did not negate the existence of a debt, and the principal amount exceeded the statutory threshold. However, the last transaction was on 31.03.2019, furnishing the nearest ascertainable point for default and limitation. The subsequently asserted default date of 30.05.2022 was unsupported by the record. As the Section 7 application was filed after expiry of the limitation period reckoned from the last transaction, the debt was time-barred.

Conclusion: The Section 7 application was not maintainable because the claim was barred by limitation.

Final Conclusion: Although the initiation of proceedings was duly authorised and the amount constituted a debt, insolvency jurisdiction could not be invoked for a time-barred claim.

Ratio Decidendi: A Section 7 insolvency application founded on an otherwise established financial debt cannot be maintained after expiry of limitation, and an unsupported later date of default cannot extend the limitation period.

Issues: (i) Whether a suspended director who is also a personal guarantor has locus standi to challenge the CIRP orders; (ii) Whether dismissal of the belated application seeking re-valuation and nullification of CIRP was valid; (iii) Whether the alleged CIRP violations and conduct of the Resolution Professional warranted interference; (iv) Whether the valuation process warranted fresh valuation; (v) Whether the appellant was unlawfully denied an opportunity to submit a competing resolution plan; (vi) Whether approval of the resolution plan disclosed non-compliance with statutory requirements or grounds for appellate interference.

Issue (i): Whether a suspended director who is also a personal guarantor has locus standi to challenge the CIRP orders.

Analysis: Although management powers stand suspended on commencement of CIRP, a personal guarantor remains directly exposed to enforcement of the corporate debtor's financial debt. That direct financial stake renders the suspended director a person aggrieved for purposes of the appellate remedy.

Conclusion: The appellant had locus standi to maintain the appeals.

Issue (ii): Whether dismissal of the belated application seeking re-valuation and nullification of CIRP was valid.

Analysis: The appellant had notice of the CoC process, its meetings and consideration of resolution plans, but did not attend the relevant meetings or pursue timely objections. He sought to challenge the process only after the CoC had approved the plan, the plan-approval application had been heard and orders reserved. The statutory scheme requires objections to be raised promptly at the appropriate CIRP stage and does not permit a participant with knowledge of the process to unravel it at the final stage.

Conclusion: The dismissal of the belated application was valid and this challenge failed against the appellant.

Issue (iii): Whether the alleged CIRP violations and conduct of the Resolution Professional warranted interference.

Analysis: The allegation regarding non-supply of the seventh CoC minutes was found by the insolvency regulator to be a procedural lapse, not a material irregularity; that finding was not challenged. The appellant did not establish inflated claims, misconduct, denial of relevant participation rights, or other alleged violations through specific contemporaneous and cogent evidence. The appellant had not complied with relevant CIRP requirements and had remained absent from CoC meetings after the first meeting.

Conclusion: No material irregularity or established CIRP violation justified setting aside the resolution process or plan; this issue was decided against the appellant.

Issue (iv): Whether the valuation process warranted fresh valuation.

Analysis: The Resolution Professional appointed two registered valuers in accordance with the CIRP Regulations, and the CoC accepted their valuations. Earlier valuations obtained before CIRP were immaterial to the statutory valuation process. Valuation is expert-driven guidance for the CoC, whose commercial decision cannot be revisited merely because an erstwhile promoter asserts a higher value; the plan consideration was also above liquidation value.

Conclusion: Fresh valuation could not be directed, and the valuation challenge failed against the appellant.

Issue (v): Whether the appellant was unlawfully denied an opportunity to submit a competing resolution plan.

Analysis: The appellant neither submitted an expression of interest nor furnished a resolution plan within the prescribed CIRP process. An investor commitment letter or informal willingness to offer a higher amount is not a resolution plan and cannot replace compliance with statutory eligibility, form and timeline requirements.

Conclusion: The appellant was not unlawfully denied an opportunity to submit a competing resolution plan; this issue was decided against the appellant.

Issue (vi): Whether approval of the resolution plan disclosed non-compliance with statutory requirements or grounds for appellate interference.

Analysis: Appellate review of plan approval is confined to the grounds under the Code, including contravention of law, material irregularity, or non-compliant treatment of operational creditors. The appellant established no breach of the mandatory requirements for plan approval. Objections to adequacy of plan consideration and valuation concern the CoC's non-justiciable commercial wisdom. The approved plan had also been fully implemented.

Conclusion: The approved resolution plan complied with mandatory requirements, and no permissible ground for appellate interference was made out; this issue was decided against the appellant.

Final Conclusion: The CIRP process, valuation exercise and CoC-approved resolution plan remain legally effective, with no basis to reopen the completed resolution process.

Ratio Decidendi: A personal guarantor who is a suspended director may challenge CIRP orders, but appellate review cannot displace a CoC-approved resolution plan absent a proved statutory contravention or material irregularity; a valuation conducted by registered valuers under the CIRP framework and accepted by the CoC cannot be reopened on assertions of greater commercial value.

Issues: Whether an application for insolvency resolution against a personal guarantor under Section 95(1) is maintainable before the NCLT where no CIRP or liquidation proceeding has been initiated against the corporate debtor.

Analysis: The statutory scheme treats liability under a guarantee as financial debt and does not make proceedings against a personal guarantor conditional upon prior or pending CIRP against the corporate debtor. The NCLT's jurisdiction concerning a personal guarantor is not excluded merely because no proceeding has been commenced against the corporate debtor. The personal guarantor's liability is co-extensive with that of the principal debtor under Section 128 of the Indian Contract Act, 1872; consequently, the creditor is not required to exhaust remedies against the corporate debtor before proceeding against the guarantor. A financial creditor has concurrent and independent remedies to proceed against the corporate debtor and/or its personal guarantor, and may elect to invoke the personal guarantee directly.

Conclusion: An application under Section 95(1) against a personal guarantor is maintainable before the NCLT even without initiation, pendency, or conclusion of CIRP or liquidation against the corporate debtor.

Issues: (i) Whether non-disposal of the intervention application before recording completion of the sale and liquidation process caused prejudice to the appellant; (ii) Whether the liquidator could sell the corporate debtor's leasehold and project rights, and the corporate debtor's legal entity, in liquidation despite the appellant's ownership and contractual rights under the BOT, lease and shareholders' arrangements.

Issue (i): Whether non-disposal of the intervention application before recording completion of the sale and liquidation process caused prejudice to the appellant.

Analysis: The intervention application sought participation, a copy of the sale application and a condition that transfer of leased land be subject to a board resolution; it did not seek cancellation of the completed sales, sale certificates or sale agreement. The sale-completion order was subject to pending litigation, and the intervention application was later withdrawn. In the absence of a contemporaneous challenge to the sale process or an effective substantive relief, recording completion of sale and liquidation was ministerial and caused no prejudice, though both applications ought preferably to have been disposed of together.

Conclusion: Non-disposal of the intervention application simultaneously with the sale-completion application did not prejudice the appellant; the finding is against the appellant.

Issue (ii): Whether the liquidator could sell the corporate debtor's leasehold and project rights, and the corporate debtor's legal entity, in liquidation despite the appellant's ownership and contractual rights under the BOT, lease and shareholders' arrangements.

Analysis: The concession, lease and shareholders' arrangements created a bundle of leasehold, operational and project rights in favour of the corporate debtor for the concession term. Although ownership of the land remained with the appellant, the corporate debtor's leasehold rights and rights to operate the project were assets capable of inclusion in the liquidation estate and sale by auction. The appellant had not terminated the contractual arrangements, and its creditor claims had already been rejected conclusively. Its equity contribution ranked last in the statutory distribution waterfall; the equity could not pass to the purchaser. The liquidation sale extinguished pre-existing liabilities consistently with the clean slate principle, while the purchaser acquired no superior rights and remained bound by the surviving BOT obligations, including remittance of the facility at the end of the stipulated term. No material irregularity, fraud or substantial undervaluation in the sale was established to warrant interference with the liquidator's commercial decision.

Conclusion: The sale of the corporate debtor's leasehold and project rights and its legal entity was valid, subject to preservation of the appellant's BOT rights; the finding is against the appellant.

Final Conclusion: The auction purchaser may exercise only the rights formerly vested in the corporate debtor, and remains bound to transfer the facility in accordance with the corporate debtor's BOT obligations at the end of the concession term.

Ratio Decidendi: Leasehold and contractual development or operational rights vested in a corporate debtor constitute liquidation assets capable of sale by the liquidator; a sale purchaser takes no better rights than the corporate debtor and remains bound by subsisting contractual obligations.

Issues: (i) Whether the order directing de-sealing of the project property was sustainable when sealing and confiscation preceded commencement of CIRP; (ii) Whether the Resolution Professional was authorised to challenge the order remanding the resolution plan; (iii) Whether contractual possession and development rights under the hire-purchase agreement constituted assets of the corporate debtor and whether the resolution plan could deal with the statutory authority's land and unauthorised construction.

Issue (i): Whether the order directing de-sealing of the project property was sustainable when sealing and confiscation preceded commencement of CIRP.

Analysis: The material established that the property was sealed in August 2019 and confiscated in July 2021, whereas CIRP commenced in May 2022. The statutory action was founded on unauthorised construction contrary to the sanctioned plan, and not on a post-moratorium recovery action. The premise that sealing occurred during moratorium was therefore erroneous.

Conclusion: The de-sealing order was unsustainable and was set aside.

Issue (ii): Whether the Resolution Professional was authorised to challenge the order remanding the resolution plan.

Analysis: The Committee of Creditors had resolved to authorise the Resolution Professional to file the appeal, and that authorisation was not controverted. The appeal was consequently not an independent action by the Resolution Professional.

Conclusion: The appeal filed by the Resolution Professional was maintainable.

Issue (iii): Whether contractual possession and development rights under the hire-purchase agreement constituted assets of the corporate debtor and whether the resolution plan could deal with the statutory authority's land and unauthorised construction.

Analysis: The hire-purchase arrangement reserved title in the statutory authority until full payment and execution of conveyance, but conferred possession, construction, commercial exploitation, transfer of constructed units and a right to seek conveyance upon compliance. These valuable contractual and development rights could constitute assets under the insolvency framework if they subsisted on the insolvency commencement date. No formal cancellation of the agreement or allotment had been made, and regulatory sealing could not by itself establish contractual termination. Nevertheless, the Resolution Professional could acquire no superior right or title, and statutory ownership could not be compulsorily transferred through a resolution plan. The plan impermissibly proceeded as if the land belonged to the corporate debtor, required transfer of the land and approvals, and sought to prevent imposition of compounding charges and require regularisation of unauthorised construction. Regularisation or compounding remained within the statutory authority's exclusive domain and required compliance with applicable law.

Conclusion: The corporate debtor's subsisting contractual and development rights were capable of treatment as assets, but the resolution plan could not transfer the statutory authority's ownership or compel regularisation of unauthorised construction; remand to the Committee of Creditors for reconsideration was upheld.

Final Conclusion: The resolution plan must be reformulated by treating only legally subsisting contractual and development rights as part of the insolvency estate, while preserving the statutory authority's title and regulatory powers.

Ratio Decidendi: Contractual possession and development rights that subsist on the insolvency commencement date may constitute assets of a corporate debtor, but insolvency resolution cannot create superior title, divest a statutory authority of its land, or override mandatory statutory approval and regularisation requirements.

Issues: (i) Whether the subject land formed part of the composite real estate project and could be dealt with in the corporate insolvency resolution process; (ii) whether the landowners' unilateral termination of the development agreement was legally effective against the corporate debtor and the rights of homebuyers; (iii) whether the approved resolution plan could proceed consistently with the statutory protection of homebuyers and the insolvency framework.

Issue (i): Whether the subject land formed part of the composite real estate project and could be dealt with in the corporate insolvency resolution process.

Analysis: The development agreement, the sanctioned layout approved by the competent planning and regulatory authorities, the contiguous nature of the land parcels, and the parties' conduct over more than a decade established that the subject land was incorporated into the integrated project. The agreement placed responsibility for obtaining approvals on the corporate debtor and required the landowners to cooperate. The absence of the landowners' signatures on particular approval documents did not invalidate the approvals, particularly when no timely objection had been raised. The project's development rights and integrated structure could not be dismembered after statutory approvals and third-party rights had crystallised.

Conclusion: The subject land formed part of the larger composite project and could not be isolated from the insolvency resolution process.

Issue (ii): Whether the landowners' unilateral termination of the development agreement was legally effective against the corporate debtor and the rights of homebuyers.

Analysis: The agreement contained both a completion period with a termination stipulation and an express non-termination clause. The landowners did not invoke termination upon expiry of the stipulated period, while approvals, construction activity, and homebuyers' rights developed over time. The delayed termination, issued shortly before commencement of CIRP, was inconsistent with the landowners' prior conduct and attracted waiver by acquiescence and the doctrine of approbation and reprobation. The crystallised rights of homebuyers could not be defeated by a unilateral communication. Following approval of the resolution plan, disputes and liabilities not preserved under the plan stood extinguished in accordance with the clean slate principle.

Conclusion: The alleged unilateral termination was not valid in law and could not defeat the CIRP or the rights of homebuyers.

Issue (iii): Whether the approved resolution plan could proceed consistently with the statutory protection of homebuyers and the insolvency framework.

Analysis: Landowners contributing land to the development arrangement were treated as promoters under the real estate regulatory framework and could not seek relief inconsistent with obligations owed to allottees. The integrated layout, common infrastructure, statutory approvals, and investments made by homebuyers made segregation of the subject land impracticable and prejudicial. The rights of homebuyers as a protected class were required to be preserved, and the resolution process could not be derailed by an inter se dispute between landowners and the corporate debtor.

Conclusion: The approved resolution plan could proceed on the basis that the subject land remained part of the integrated project, subject to protection of the rights of homebuyers and other stakeholders.

Final Conclusion: The landowners failed to establish any legal basis for excluding the subject land or invalidating the resolution process, and their challenge to the approved resolution plan was rejected.

Ratio Decidendi: Where land is contributed to and incorporated in an integrated real estate project, statutory approvals have been obtained on that basis, and third-party homebuyer rights have crystallised, the landowner cannot subsequently isolate the land or unilaterally terminate the development arrangement to defeat the corporate insolvency resolution process.

Issues: (i) Whether the insolvency proceedings initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016 were rendered non-est by the invalidated RBI circular dated 12.02.2018. (ii) Whether the existence of alleged dues from the Uttar Pradesh Government and the principle in Vidharbha Industries Power Ltd. justified refusal to admit the Corporate Debtor into CIRP despite established debt and default.

Issue (i): Whether the insolvency proceedings initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016 were rendered non-est by the invalidated RBI circular dated 12.02.2018.

Analysis: Proceedings initiated solely because of the RBI circular dated 12.02.2018 would be non-est in view of its invalidation. However, the financial creditor had recalled the loan, issued a legal notice and commenced recovery proceedings before the circular was issued. The Section 7 application was not based on the circular, the debt was below the circular's specified threshold, and no approved restructuring or one-time settlement existed. The insolvency proceedings were therefore independent of the circular.

Conclusion: The proceedings under Section 7 were not rendered non-est and the challenge based on the RBI circular fails.

Issue (ii): Whether the existence of alleged dues from the Uttar Pradesh Government and the principle in Vidharbha Industries Power Ltd. justified refusal to admit the Corporate Debtor into CIRP despite established debt and default.

Analysis: The alleged governmental dues did not constitute an adjudicated and realisable claim exceeding the debt owed. The exception recognised in Vidharbha Industries Power Ltd. is narrow and does not dilute the rule that admission under Section 7 follows once debt and default are established. In the absence of an approved settlement proposal, the Adjudicating Authority was justified in admitting the Corporate Debtor into CIRP.

Conclusion: The existence of alleged governmental dues did not justify refusal of admission, and the admission of the Corporate Debtor into CIRP was upheld.

Final Conclusion: The challenge to the CIRP admission failed, while the connected farmers' appeal was disposed of with the Resolution Professional directed to consider the farmers' claims in accordance with law.

Ratio Decidendi: Once debt and default are established, admission under Section 7 of the Insolvency and Bankruptcy Code, 2016 is mandatory unless the narrow exception based on an adjudicated and realisable claim exceeding the debt owed is satisfied; proceedings are not rendered non-est where they were initiated independently of an invalidated regulatory circular.

Issues: Whether, for admission of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, the interest component on inter corporate deposits could be included in the financial debt for determining default above the threshold under Section 4, where the interest obligation was supported by oral arrangement, TDS deductions, and the corporate debtor's written acknowledgment of the total outstanding dues.

Analysis: Section 7 of the Insolvency and Bankruptcy Code, 2016 requires satisfaction regarding the existence of financial debt, occurrence of default, and completeness of the application. Section 5(8) of the Insolvency and Bankruptcy Code, 2016 defines financial debt as a debt along with interest, if any, disbursed against consideration for the time value of money. On that statutory framework, interest forming part of the agreed financial arrangement cannot be excluded while assessing the amount of default under Section 4 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The record showed admitted inter corporate deposit transactions, partial repayments, calculation of accrued interest, deduction and deposit of TDS on the interest component, and, most materially, the corporate debtor's reply dated 19.09.2024 acknowledging liability for the total claimed amount and seeking time to pay. The claim for interest was therefore not a unilateral assertion resting only on TDS entries. Absence of a written agreement on interest did not defeat the claim where the surrounding circumstances and subsequent conduct established an oral understanding regarding payment of interest.

Analysis: Excluding the interest component merely because no written agreement existed and treating the case as based only on TDS deductions led to an erroneous computation of default. The relevant inquiry was the total financial debt due and payable, including legally payable interest, and whether that total crossed the statutory threshold. The cumulative material established both the existence of financial debt and default above the threshold required for Section 7.

Conclusion: The interest component was includible in the financial debt for purposes of Sections 5(8), 4 and 7 of the Insolvency and Bankruptcy Code, 2016, and the appellant successfully established financial debt and default above the statutory threshold. The impugned order rejecting the Section 7 application was unsustainable and was set aside in favour of the appellant.

Issues: Whether the corporate insolvency resolution process could be closed where no claims had been received following the public announcement and the parties had entered into discharge arrangements.

Analysis: The public announcement had been issued, yet the resolution professional confirmed that no claims were received in the corporate insolvency resolution process. Applying the principle that insolvency proceedings may be closed in appropriate circumstances, including where there is no subsisting claimant or impediment to closure, the discharge arrangements supported termination of the process. The consequential release of the bank lien and disbursement was directed in accordance with the discharge agreements.

Conclusion: The corporate insolvency resolution process was closed, the impugned order was set aside, and the bank lien was withdrawn for disbursement under the discharge agreements.