Development rights in insolvency remain protected when termination is unproven and post-CIRP transfer breaches the moratorium.

Development rights in the project land were held not to have been validly terminated, because the 17.06.2009 letter was not shown to have been duly communicated or acted upon, and subsequent conduct was inconsistent with termination. Earlier Supreme Court proceedings and the recorded settlement treated the development arrangement as continuing, and the appellant's earlier regulatory statements also supported that position. The Adjudicating Authority was competent to examine those rights as an insolvency asset and to refuse exclusion of the project from CIRP. Any post-CIRP transfer of the same development rights to a third party was contrary to the moratorium and void in law.

---

---

Issues: (i) Whether the development rights in the subject land stood terminated by the letter dated 17.06.2009 and were given effect to; (ii) whether the earlier Supreme Court proceedings and the settlement recorded therein showed continuance of the development rights in favour of the corporate debtor; (iii) whether the appellant had earlier taken a contrary stand before the regulatory authorities regarding continuation of such rights; (iv) whether the Adjudicating Authority had jurisdiction to examine the corporate debtor's development rights and refuse exclusion of the project from CIRP; and (v) whether the post-CIRP transfer of development rights to Parcela was valid.

Issue (i): Whether the development rights in the subject land stood terminated by the letter dated 17.06.2009 and were given effect to.

Analysis: The alleged termination letter was produced for the first time much later and was not shown to have been duly communicated or acted upon. The record also showed that the contractual clause on dishonour contemplated automatic termination, but the owners did not perform the corresponding obligation to refund the consideration after forfeiture. Subsequent conduct, including continued construction activity, was inconsistent with a concluded and acted-upon termination.

Conclusion: The development rights were not validly terminated by the letter dated 17.06.2009, and the letter was not given effect to.

Issue (ii): Whether the earlier Supreme Court proceedings and the settlement recorded therein showed continuance of the development rights in favour of the corporate debtor.

Analysis: The settlement recorded in the earlier proceedings treated the development arrangement as subsisting. The clauses dealing with payment of licence dues, renewal of licences, and liberty to terminate agreements in specified contingencies proceeded on the basis that the agreements with the developer companies, including the corporate debtor, were still alive. The later contempt order also proceeded on the footing that the development rights had been divided and continued in the project structure.

Conclusion: The earlier Supreme Court proceedings did not establish termination of the development agreement; they reflected continuance of the corporate debtor's development rights.

Issue (iii): Whether the appellant had earlier taken a contrary stand before the regulatory authorities regarding continuation of such rights.

Analysis: Before the Haryana RERA and the DTCP, the appellant had represented that development rights had been transferred to five developer companies and that it retained no further development rights in the project. Those statements were inconsistent with the later plea that the corporate debtor's rights had been terminated and ceased long before CIRP.

Conclusion: The appellant had earlier pleaded continuance of the development structure and divestment of its own interest, which was inconsistent with its later challenge.

Issue (iv): Whether the Adjudicating Authority had jurisdiction to examine the corporate debtor's development rights and refuse exclusion of the project from CIRP.

Analysis: Development rights over immovable property constitute property and an asset of the corporate debtor for insolvency purposes. Since the dispute went to the existence and protection of an insolvency asset, the Adjudicating Authority was competent to decide it. The challenge based on lack of jurisdiction therefore failed.

Conclusion: The Adjudicating Authority had jurisdiction to decide the issue and to refuse exclusion of the project from CIRP.

Issue (v): Whether the post-CIRP transfer of development rights to Parcela was valid.

Analysis: Once CIRP had commenced, the moratorium restrained alienation or disposition of the corporate debtor's assets. The appellant could not, during the subsistence of CIRP and while its own exclusion application was pending, transfer the same development rights to a third party. Such transfer was contrary to the moratorium and lacked legal authority.

Conclusion: The transfer in favour of Parcela was void, without jurisdiction, and non est in law.

Final Conclusion: The appeals failed. The project land and related development rights remained part of the corporate debtor's insolvency estate, the exclusion plea was rejected, and the attempted third-party transfer could not stand.

Ratio Decidendi: Development rights created by agreement in favour of a corporate debtor are an insolvency asset protected by the moratorium, and they cannot be treated as terminated or transferred away unless termination is proved to have been effectively acted upon and lawful consequences followed.

---