Insolvency resolution cannot override municipal property control where statute requires specific approval for leasing or encumbrance.

A resolution plan under the Insolvency and Bankruptcy Code could not create fresh interests in municipal land or burden public property without compliance with the Mumbai Municipal Corporation Act. The insolvency law's non obstante clause did not displace the municipal corporation's statutory control over leasing, conveying, or encumbering its own property, because the special approval mechanism under the municipal statute remained mandatory. Statements or concessions by counsel could not bind the municipal corporation where they conflicted with statutory requirements, and there can be no estoppel against statute. The approval of the resolution plan was therefore unsustainable to the extent it affected municipal lands without lawful sanction.

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Issues: (i) Whether a resolution plan under the Insolvency and Bankruptcy Code could validly deal with municipal land and create fresh interests in it without approval under the Mumbai Municipal Corporation Act; (ii) Whether the non obstante clause in the Insolvency and Bankruptcy Code overrides the statutory control vested in the municipal corporation under Sections 92 and 92A; (iii) Whether the municipal corporation was bound by statements or concessions made by its counsel before the insolvency forums.

Issue (i): Whether a resolution plan under the Insolvency and Bankruptcy Code could validly deal with municipal land and create fresh interests in it without approval under the Mumbai Municipal Corporation Act.

Analysis: The contract between the parties contemplated only an agreement to enter into a lease upon completion of the project, and the project had not been completed. The municipal land remained public property, and the plan proposed structures that would require creation of charge or other interests over that land. In the absence of the approval mechanism mandated by the municipal statute, the insolvency forums could not sanction a plan that affected the corporation's property rights in the manner proposed.

Conclusion: The resolution plan could not validly be approved to the extent it implicated or burdened the municipal lands without compliance with the municipal statute.

Issue (ii): Whether the non obstante clause in the Insolvency and Bankruptcy Code overrides the statutory control vested in the municipal corporation under Sections 92 and 92A.

Analysis: The overriding effect of the insolvency law operates where there is inconsistency in relation to the debtor's assets and rights. It does not displace a third party's statutory power to regulate disposal or encumbrance of its own public property. Sections 92 and 92A prescribe the exclusive manner in which municipal property may be leased, conveyed, or subjected to obligations, and that statutory control could not be eclipsed by the insolvency process in the absence of the required municipal approval.

Conclusion: Section 238 of the Insolvency and Bankruptcy Code did not override the municipal corporation's statutory control over its own property.

Issue (iii): Whether the municipal corporation was bound by statements or concessions made by its counsel before the insolvency forums.

Analysis: A concession made in proceedings cannot bind a public body where the concession is inconsistent with the express requirements of law and where the requisite statutory approval was never obtained. There can be no estoppel against statute, and the written statements could not substitute for valid corporate sanction under the municipal enactment.

Conclusion: The municipal corporation was not bound by the alleged concessions.

Final Conclusion: The approval of the resolution plan and the appellate affirmation of that approval were unsustainable insofar as they purported to affect the municipal corporation's lands without lawful sanction under the municipal statute, and the appeal succeeded.

Ratio Decidendi: Where a statute prescribes a specific mode for dealing with property, that mode alone must be followed, and the insolvency code cannot override a third party's independent statutory control over its own public property absent the approvals mandated by that law.

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