Development rights and arbitral interim orders do not bar Section 7 insolvency proceedings or the moratorium under the Code.

Development rights in a real estate project can be treated as property and assets of the corporate debtor for insolvency purposes, and the Adjudicating Authority may consider the project as an integrated whole when examining the Section 7 threshold. Interim arbitral orders do not operate in rem and do not prevent admission of a Section 7 petition or the operation of moratorium and overriding provisions under the Insolvency and Bankruptcy Code. Observations on Tower 5 were treated as contextual and not as a final adjudication of title or ownership, because no such issue had been sought for determination. The challenge was rejected and the CIRP left undisturbed.

---

---

Issues: (i) Whether the impugned observations concerning Tower 5 and the development rights agreement called for interference on the ground of lack of notice or adjudication beyond the scope of the interlocutory application. (ii) Whether the inclusion of Tower 5 and the reference to arbitration/interim orders affected the maintainability of the Section 7 petition or the corporate insolvency resolution process.

Issue (i): Whether the impugned observations concerning Tower 5 and the development rights agreement called for interference on the ground of lack of notice or adjudication beyond the scope of the interlocutory application.

Analysis: The interlocutory application was confined to placing the Delhi High Court and arbitral interim orders on record and seeking that the insolvency order not conflict with those orders. The observations in the impugned order regarding the development rights arrangement were treated as contextual observations made in the course of considering the limited prayer and not as findings finally determining title or ownership. The Appellant had not sought adjudication of title before the Adjudicating Authority, and no final finding on Tower 5 rights was recorded.

Conclusion: The challenge on this ground failed, and the impugned observations did not warrant interference.

Issue (ii): Whether the inclusion of Tower 5 and the reference to arbitration/interim orders affected the maintainability of the Section 7 petition or the corporate insolvency resolution process.

Analysis: The project was treated as a single integrated real estate project, and the Adjudicating Authority was required to examine the statutory threshold under Section 7 on the basis of the total units and the number of applicants. Development rights were treated as capable of constituting property and, therefore, assets within the insolvency framework. The interim orders in arbitration were held not to operate in rem, while the moratorium and overriding effect under the Code meant that arbitration could not hinder the CIRP. The Appellant's remedy, if any, lay in the insolvency process and before the Resolution Professional.

Conclusion: The inclusion of Tower 5 for threshold and insolvency purposes was upheld, and the arbitration-related objections were rejected.

Final Conclusion: No ground for appellate interference was made out, and the challenge to the impugned order was rejected, leaving the CIRP undisturbed.

Ratio Decidendi: Development rights can constitute property and assets of the corporate debtor for insolvency purposes, and interim arbitration orders do not prevent a Section 7 admission or the operation of the moratorium and overriding provisions of the Insolvency and Bankruptcy Code, 2016.

---