Contractual development rights may enter insolvency estate, but resolution plans cannot override statutory land title or regulatory approvals.

Contractual possession and development rights subsisting on the insolvency commencement date may form part of the corporate debtor's insolvency estate, despite title remaining with the statutory authority under a hire-purchase arrangement. However, insolvency resolution cannot confer superior title, compel transfer of the authority's land, or override statutory requirements governing approvals, compounding, and regularisation of unauthorised construction. Sealing and confiscation undertaken before commencement of CIRP for regulatory violations were not barred by the moratorium, making the de-sealing direction unsustainable. A Resolution Professional may challenge a remand order where duly authorised by the Committee of Creditors. The resolution plan required reformulation to preserve statutory title and regulatory powers.

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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.

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