Issues: (i) Whether approval of a resolution plan extinguishes the operational creditor's pre-CIRP claim while preserving the corporate debtor's claim against the operational creditor and permitting arbitration; (ii) Whether an extinguished pre-CIRP claim arising from the same contract may be raised solely as a set-off in the arbitration; (iii) Whether the arbitration invocation and application were within limitation after exclusion of the moratorium period.

Issue (i): Whether approval of a resolution plan extinguishes the operational creditor's pre-CIRP claim while preserving the corporate debtor's claim against the operational creditor and permitting arbitration.

Analysis: Section 31(1) of the Insolvency and Bankruptcy Code, 2016 freezes and extinguishes pre-resolution-plan claims against the corporate debtor, including claims not forming part of the approved plan. This clean slate consequence applies against the corporate debtor and successful resolution applicant, but does not automatically extinguish debts owed to the corporate debtor, which the successful resolution applicant may pursue. The arbitration agreement, being separable from the underlying contract, survived its termination and the plan approval. The settled statutory consequence of the approved plan was not an issue left for arbitral determination.

Conclusion: The operational creditor cannot seek affirmative recovery of its extinguished claim against the corporate debtor or successful resolution applicant, while the successful resolution applicant may pursue the corporate debtor's surviving contractual claim in arbitration.

Issue (ii): Whether an extinguished pre-CIRP claim arising from the same contract may be raised solely as a set-off in the arbitration.

Analysis: The competing claims arose from the same contract. The operational creditor's claim had been disclosed and accepted in the resolution process, but was substantially reduced under the approved plan; the corresponding claim of the corporate debtor had not been pursued during CIRP. In the exceptional circumstances, a defensive set-off reconciles the clean slate principle with equitable treatment of reciprocal claims without reviving an extinguished debt as an independently recoverable claim.

Conclusion: The operational creditor may raise its entire pre-CIRP claim as a counterclaim only for set-off against any amount found payable to the successful resolution applicant, and cannot obtain affirmative monetary recovery on that basis.

Issue (iii): Whether the arbitration invocation and application were within limitation after exclusion of the moratorium period.

Analysis: The contractual termination occurred after commencement of CIRP. On excluding the moratorium period, both the arbitration notice and the application for appointment of an arbitrator fell within the applicable limitation period.

Conclusion: The arbitration invocation and the application for appointment of an arbitrator were within limitation.

Final Conclusion: The arbitral proceedings may determine the successful resolution applicant's contractual demand, subject to the operational creditor's limited right of set-off; the clean slate protection against affirmative recovery remains intact.

Ratio Decidendi: An approved resolution plan extinguishes claims against the corporate debtor but does not extinguish the corporate debtor's claims against its debtors; where reciprocal claims arise from the same contract, an extinguished creditor claim may exceptionally be permitted only as a defensive set-off and not as a source of affirmative recovery.

Issues: (i) Whether the Adjudicating Authority has the power and jurisdiction to recall CIRP by dismissing an admitted Section 9 petition founded on fraud and collusion?; (ii) Whether CIRP can continue after its original Section 9 application is found to have been fraudulently and collusively initiated?

Issue (i): Whether the Adjudicating Authority has the power and jurisdiction to recall CIRP by dismissing an admitted Section 9 petition founded on fraud and collusion?

Analysis: The existence of a debt and default is a jurisdictional fact for assumption of insolvency jurisdiction. A jurisdictional fact procured through fraud or collusion cannot sustain the exercise of statutory power. In public-law proceedings, deception of the adjudicatory process or a collusive presentation of facts undermines the integrity of the process and permits correction despite the ordinary finality of an admission order. The purported operational debt was conclusively found to be illusory and presented through collusion to procure CIRP and a moratorium.

Conclusion: The Adjudicating Authority has the power and jurisdiction to recall admission of CIRP by dismissing a Section 9 application founded on fraudulent and collusive jurisdictional facts.

Issue (ii): Whether CIRP can continue after its original Section 9 application is found to have been fraudulently and collusively initiated?

Analysis: Before admission, insolvency proceedings are in personam between the initiating creditor and the corporate debtor. Upon admission, CIRP becomes an in rem and collective process: the moratorium operates, management vests in the insolvency professional, claims of all creditors are collated, and the Committee of Creditors participates in resolution. The initiating creditor consequently ceases to control the process, and withdrawal is not unilateral. The original collusive applicant must be excluded and action under the Code may follow, but the continuation of CIRP depends on a reasoned assessment of the resolution professional's submissions, the commercial wisdom of the Committee of Creditors, the interests of stakeholders, and the capacity to conduct the process with integrity and transparency.

Conclusion: CIRP need not automatically terminate because the original Section 9 application was fraudulent and collusive. The Adjudicating Authority may continue it after hearing the resolution professional, the Committee of Creditors and affected stakeholders, while disallowing the original applicant from participation.

Final Conclusion: Fraudulent initiation permits recall of insolvency admission, but does not by itself extinguish a mature collective insolvency process; continuance depends on a transparent and stakeholder-informed determination directed to the statutory objects of insolvency resolution.

Ratio Decidendi: Fraud or collusion in jurisdictional facts permits recall of CIRP admission, but an admitted CIRP may continue where the Adjudicating Authority determines that collective stakeholder interests and the statutory purpose of insolvency resolution so require.

Issues: Whether a successful liquidation-auction bidder who failed to pay the balance sale consideration within the stipulated period was entitled to refund of the deposited amount despite an express forfeiture clause in the auction notice and the ceiling on earnest money deposit under Schedule I.

Analysis: Schedule I of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 limited the earnest money deposit to 10% of the reserve price but did not displace an express auction condition permitting forfeiture of the entire amount deposited upon a successful bidder's failure to pay the balance consideration. The bidder accepted the sale on an as-is-where-is basis, with prior disclosure of the title-related issue, and voluntarily deposited the stipulated amount comprising the earnest money deposit and part of the sale consideration. The asserted need for prior title deeds arose only near the payment deadline and could not justify non-payment. The triple test did not assist the bidder: repeated assurances did not establish financial capacity, and the proceedings initiated by another entity did not constitute an extraneous impediment preventing payment. The allegation of unequal treatment was raised belatedly and without supporting material.

Conclusion: The forfeiture of the entire deposited amount, including the earnest money deposit and part sale consideration, was valid, and no refund was due.

Issues: Whether an appeal electronically filed beyond the outer condonable period under Section 61(2) of the Insolvency and Bankruptcy Code, 2016, solely because of a technical failure in the tribunal's e-filing system, could be treated as having been presented within time.

Analysis: Section 61(2) prescribes a mandatory thirty-day limitation period with a further condonable period of fifteen days, and does not empower the appellate tribunal to condone delay beyond that limit. However, limitation runs only when the forum is capable of receiving a bona fide filing. The registry report established that timely e-filing attempts were frustrated by OTP-delivery and backend failures in the e-filing system, without any negligence, laches, ignorance of law, or fault attributable to the appellant. The principle of actus curiae neminem gravabit, together with the principle reflected in Order VII Rule 6 of the Code of Civil Procedure, 1908, permits exclusion of the period during which the tribunal's system was non-functional and treatment of the first bona fide e-filing attempt as the date of presentation.

Conclusion: The statutory outer limit did not prevent exclusion of the period lost solely because of the tribunal's system failure; the appeal was required to be reconsidered by treating the bona fide initial filing attempt as the relevant date of presentation.

Issues: Whether a successful resolution applicant is required to discharge employees' provident-fund and gratuity dues, including statutory interest, notwithstanding an approved resolution plan.

Analysis: Provident-fund and gratuity dues are excluded from the liquidation estate and cannot be subjected to distribution under the insolvency waterfall. A resolution plan must comply with applicable law, while the statutory first charge for provident-fund dues prevails. Interest under Section 7Q is statutorily payable and is distinct from damages under Section 14B.

Conclusion: A successful resolution applicant must pay provident-fund and gratuity dues in full, together with interest payable under Section 7Q; such dues are not distributable under the insolvency waterfall.

Issues: Whether NOIDA's time-extension charges for delay in completing the housing projects could be imposed on the successful resolution applicant and homebuyers as Corporate Insolvency Resolution Process costs.

Analysis: The time-extension charges under the lease and the subsequent policy were penal charges intended to deter a defaulting developer and secure timely completion. The developer's default led to insolvency, while the homebuyers funded continuation of construction and the successful resolution applicant was to implement an approved resolution plan. Requiring them to bear charges arising from the corporate debtor's past default would penalise parties not responsible for the delay and defeat the developmental purpose of the lease and completion of the housing projects.

Conclusion: In the peculiar facts, NOIDA's time-extension penalty charges cannot validly be imposed on the successful resolution applicant or homebuyers as Corporate Insolvency Resolution Process costs, including charges claimed beyond three years.

Issues: (i) Whether the EPC contract was frustrated by efflux of time; (ii) Whether the amounts claimed under the EPC contract constituted operational debt; (iii) Whether a pre-existing dispute barred the insolvency application; and (iv) Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Issue (i): Whether the EPC contract was frustrated by efflux of time.

Analysis: The contractual termination provisions made termination elective and subject to stipulated notices. Neither party terminated the contract, and suspension due to non-payment did not amount to termination. Efflux of time concerns the natural expiry of a contract, whereas frustration under Section 56 of the Indian Contract Act, 1872 requires an unforeseen supervening impossibility. A suspension resulting from the parties' own non-performance is not such an impossibility, and time was not stipulated to be of the essence.

Conclusion: The EPC contract was not frustrated by efflux of time and continued to subsist.

Issue (ii): Whether the amounts claimed under the EPC contract constituted operational debt.

Analysis: Amounts payable under the contractual payment schedule were consideration for goods and works supplied under the EPC contract and consequently fell within operational debt. Suspension, idling and demobilization charges arose from the alleged contractual breach and were damages; such damages do not become operational debt unless assessed and crystallised by a competent forum.

Conclusion: Contractual milestone payments qualified as operational debt, but the claims for suspension, idling and demobilization charges did not qualify as operational debt unless adjudicated and crystallised.

Issue (iii): Whether a pre-existing dispute barred the insolvency application.

Analysis: A Section 9 application is barred only by a genuine, pre-existing dispute, which need not have culminated in litigation or arbitration but must be evidenced by conduct or communications. The corporate debtor did not respond to the repeated legal notices or the statutory demand notice and raised its defence only in response to the insolvency application. Its total and consistent silence was material evidence that no genuine dispute existed at the relevant time.

Conclusion: No pre-existing dispute existed to bar the Section 9 application.

Issue (iv): Whether the application under Section 9 of the Insolvency and Bankruptcy Code, 2016 was barred by limitation.

Analysis: Under Sections 3(12) and 238A of the Insolvency and Bankruptcy Code, 2016, read with Article 137 of the Schedule to the Limitation Act, 1963, limitation runs from the date on which the debt became due and payable and default occurred. Each invoice or payment default has its own limitation period; continued subsistence of the contract does not create a continuing cause of action for an accrued default. The liabilities were acknowledged in January and February 2012, but the insolvency application was not pursued within three years. Legal notices issued by the creditor could not reset limitation, since Section 18 of the Limitation Act, 1963 requires a written acknowledgment by the party against whom the claim is made.

Conclusion: The Section 9 application was time-barred because the defaults occurred more than three years before its filing and no valid acknowledgment or condonation extended limitation.

Final Conclusion: The insolvency admission could not stand because the operational-debt claim invoked for insolvency was barred by limitation, notwithstanding that the EPC contract subsisted and no pre-existing dispute was established.

Ratio Decidendi: For a Section 9 insolvency application, limitation runs separately from the date each operational debt becomes due and unpaid; subsistence of the underlying contract and unilateral creditor notices do not create a continuing cause of action or extend limitation without a valid acknowledgment by the debtor.

Issues: Whether a moratorium against the corporate debtor under the Insolvency and Bankruptcy Code, 2016 prevents continuation of a consumer complaint against non-corporate-debtor co-respondents.

Analysis: The statutory moratorium under Section 14 is confined to the corporate debtor and cannot be extended to directors, promoters, associated entities or other respondents unless the statute expressly so provides. As no moratorium protected the co-respondents, their potential liability required adjudication in the consumer complaint. The Commission could not, while acknowledging that liability remained undetermined, foreclose proceedings against them by attributing the alleged deficiency exclusively to the corporate debtor at an interlocutory stage.

Conclusion: The consumer complaint may proceed against the co-respondents notwithstanding the moratorium applicable to the corporate debtor; their liability and objections must be determined on merits by the Commission.

Issues: Whether pending civil and arbitral proceedings concerning operational-credit claims, which had not crystallised into determinable and quantifiable claims before approval of the resolution plan, survived the approved resolution plan.

Analysis: The final list of operational creditors quantified the disputed claims at a notional value of Re.1 and did not preserve them subject to the outcome of pending proceedings. The resolution plan, which had attained finality, provided that the settlement corpus available to relevant operational creditors was payable pro rata only for crystallised and approved claims within the stipulated period. Its provisions, read harmoniously, discharged and extinguished pre-effective-date liabilities and required pending proceedings by operational creditors to be withdrawn, abated, settled or extinguished. The clean slate and fresh start principles preclude indeterminate claims from resurfacing after plan approval. There was no ambiguity warranting application of contra proferentem or adoption of a face-value reservation mechanism.

Conclusion: Pending civil and arbitral claims that had not crystallised by approval of the resolution plan stood abated, waived, withdrawn and extinguished; the operational creditors were entitled to no amount beyond their quantified Re.1 claims. The issue is decided in favour of the appellant.

Issues: Whether adjudicatory orders founded on fake, non-existent or hallucinated AI-generated precedents can be sustained in law, and whether such orders require to be set aside.

Analysis: The judgment records that the adjudicating authority relied upon citations and passages that were non-existent, incorrectly attributed, or otherwise hallucinated, and that the appellate tribunal failed to detect the defect. It holds that a decision based on fake or hallucinated material as precedent contaminates the adjudicatory process, subverts the integrity of judicial determination, and amounts to no decision in the eyes of law. The Court also emphasises zero tolerance for the citation or reliance on such material by both the Bar and the Bench.

Conclusion: The impugned orders were unsustainable and were set aside, with the matter restored for fresh consideration in accordance with law.

Issues: Whether delay in filing and re-filing an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 can be condoned beyond the statutory outer limit and beyond the period allowed for curing defects under the Supreme Court Rules, 2013.

Analysis: Section 62 of the Insolvency and Bankruptcy Code, 2016 prescribes a strict limitation regime, allowing an appeal within 45 days and, on sufficient cause, only a further 15-day grace period. The Court held that once the statutory window closes, the jurisdiction to condone filing delay ceases. It further held that a defective appeal under Section 62 must be cured within the 28-day period contemplated by Rule 6 of Order VIII of the Supreme Court Rules, 2013, and that re-filing delay beyond that period cannot be condoned so as to keep the appeal alive. The Court rejected the contention that re-filing delay stands on a different footing from filing delay in this statutory setting and held that Article 142 cannot be used to override the express limitation scheme.

Conclusion: Condonation of the delay in filing and re-filing was held impermissible, and the appeal was dismissed as time-barred.

Issues: (i) Whether the letter of intent issued to the successful resolution applicant was rendered conditional by stipulations referring to pending proceedings and risk allocation, (ii) whether the forfeiture of earnest money deposit for non-acceptance of the letter of intent and failure to submit the performance guarantee was lawful, and (iii) whether the Committee of Creditors could validly reject the resolution plan and proceed to liquidation after the applicant's default.

Issue (i): Whether the letter of intent issued to the successful resolution applicant was rendered conditional by stipulations referring to pending proceedings and risk allocation.

Analysis: The stipulations in the letter of intent only recorded that the resolution process would remain subject to the outcome of pending proceedings and that liabilities relating to employee and worker claims would be borne by the successful resolution applicant in accordance with the resolution framework. The applicant had participated in the relevant Committee of Creditors meetings, was aware of the pending litigation, and expressly accepted the relevant terms. In that context, the Court found no basis to treat the letter of intent as a conditional instrument that entitled the applicant to resile from the approved plan.

Conclusion: The challenge to the letter of intent failed, and the stipulations did not make it conditional in the sense urged by the appellant.

Issue (ii): Whether the forfeiture of earnest money deposit for non-acceptance of the letter of intent and failure to submit the performance guarantee was lawful.

Analysis: Clause 1.9.4 of the Request For Resolution Plan authorized forfeiture where the successful applicant failed to submit the performance guarantee within time or otherwise failed to comply with the resolution process. The Court noted that the seven-day period for performance guarantee was consistent with the Request For Resolution Plan and that the applicant had earlier agreed to comply with that requirement. The applicant's refusal to accept the terms and subsequent resistance to the process justified invocation of the forfeiture clause.

Conclusion: The forfeiture of the earnest money deposit was held to be valid and lawful.

Issue (iii): Whether the Committee of Creditors could validly reject the resolution plan and proceed to liquidation after the applicant's default.

Analysis: The Court held that once the Committee of Creditors had approved the plan and the applicant failed to proceed in accordance with its obligations, no further modification or withdrawal at the applicant's instance was permissible. The applicant was found to have acquiesced in the terms and could not approbate and reprobate. The Court further held that Section 33 of the Insolvency and Bankruptcy Code, 2016 permits liquidation before confirmation of a resolution plan when the Committee of Creditors so decides in exercise of its commercial wisdom, and such decision is not amenable to judicial interference absent statutory infraction.

Conclusion: The decision to reject the plan and liquidate the corporate debtor was upheld.

Final Conclusion: The appeals failed, the orders of the fora below were sustained, and the liquidation process was permitted to continue in accordance with the Code.

Ratio Decidendi: A successful resolution applicant who has knowingly accepted the terms of the resolution process cannot later resile from an approved plan by characterising agreed stipulations as conditional, and the Committee of Creditors' commercially wise decision to reject such a defaulting plan and move to liquidation is not open to judicial review except on limited statutory grounds.

Issues: (i) Whether the appellant was ineligible under Section 29A(c) of the Insolvency and Bankruptcy Code, 2016 on account of an alleged past NPA and shortfall relating to another corporate debtor; (ii) Whether the appellant was ineligible under Section 29A(j) of the Insolvency and Bankruptcy Code, 2016 on the basis of the alleged ineligibility of its connected person.

Issue (i): Whether the appellant was ineligible under Section 29A(c) of the Insolvency and Bankruptcy Code, 2016 on account of an alleged past NPA and shortfall relating to another corporate debtor.

Analysis: The relevant point of time for testing disqualification under Section 29A(c) is the date of submission of the resolution plan. A past NPA that had already been resolved under an approved resolution plan, with the earlier dues extinguished and the corporate debtor operating on a clean slate, cannot be resurrected to deny eligibility later. The appellant was not itself an NPA on the date of submission of its plan, and the material did not show that its connected person was then managing or controlling any subsisting NPA account.

Conclusion: The appellant was not ineligible under Section 29A(c).

Issue (ii): Whether the appellant was ineligible under Section 29A(j) of the Insolvency and Bankruptcy Code, 2016 on the basis of the alleged ineligibility of its connected person.

Analysis: Section 29A(j) operates only if a connected person is independently disqualified under clauses (a) to (i). Once the supposed disqualification under Section 29A(c) was found unsustainable, the derivative disqualification under Section 29A(j) also could not survive. The record also did not establish any material connection between the appellant or its connected person and the prior resolved corporate debtor so as to attract the bar.

Conclusion: The appellant was not ineligible under Section 29A(j).

Final Conclusion: The disqualification findings were unsustainable, the impugned orders were set aside, and the appellant was held eligible to participate in the corporate insolvency resolution process with its resolution plan to be processed in accordance with law.

Ratio Decidendi: Eligibility under Section 29A(c) must be assessed with reference to the date of submission of the resolution plan, and a previously resolved NPA with extinguished dues cannot form the basis of disqualification thereafter.

Issues: (i) Whether an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 filed and refiled without a certified copy of the impugned order, and without seeking exemption from filing it, was maintainable. (ii) Whether the National Company Law Appellate Tribunal was justified in condoning the delay in filing and refiling the appeal.

Issue (i): Whether an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 filed and refiled without a certified copy of the impugned order, and without seeking exemption from filing it, was maintainable.

Analysis: Rule 22(2) of the National Company Law Appellate Tribunal Rules, 2016 requires every appeal to be accompanied by a certified copy of the impugned order. The absence of that document at the stage of refiling was not treated as a mere curable irregularity in the facts of the case, because the certified copy had not even been applied for before the appeal was refiled and no exemption had been sought under the relevant procedural rules. The filing and refiling were therefore held to be contrary to the essential requirements governing institution of the appeal.

Conclusion: The appeal, as filed and refiled, was not maintainable and was liable to be rejected at the threshold.

Issue (ii): Whether the National Company Law Appellate Tribunal was justified in condoning the delay in filing and refiling the appeal.

Analysis: The statutory timeline under Section 61 of the Insolvency and Bankruptcy Code, 2016 was treated as strict, and the requirement of a certified copy was linked to diligence and lawful institution of the appeal. Since the appeal was presented and re-presented without compliance with the certified-copy requirement and without the necessary exemption application, the Tribunal should first have examined whether a valid appeal had been instituted at all before granting indulgence on delay. Its failure to do so vitiated the order condoning delay.

Conclusion: The condonation of delay was unjustified and the order granting it could not be sustained.

Final Conclusion: The impugned order of the National Company Law Appellate Tribunal was set aside and the appeals were allowed because the underlying appeal had not been properly instituted in accordance with the mandatory procedural requirements.

Ratio Decidendi: In proceedings under the Insolvency and Bankruptcy Code, compliance with the mandatory requirement of filing a certified copy of the impugned order is an essential condition for a valid appeal, and an appeal filed or refiled without such compliance, and without seeking exemption, is incompetent and cannot be saved by condonation of delay alone.

Issues: Whether the ingredients for initiation of corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016 were made out when the loan amount was disbursed directly to the builder under a quadripartite arrangement and the dispute was substantially contractual in nature.

Analysis: Invocation of Section 7 requires the existence of a financial debt and a default in repayment. The Code is intended as a collective insolvency resolution framework and not as a mechanism for adjudicating or enforcing individual contractual claims or for compelling payment in a recovery dispute. On the terms of the quadripartite agreement, the Bank's disbursement was linked to the builder's obligations concerning construction, delivery and transfer of the subject property, while the transaction also contemplated lien, refund and transfer-related obligations. The dispute therefore arose out of intertwined contractual obligations and was already the subject of proceedings before the Debt Recovery Tribunal.

Conclusion: The case was not a straightforward financial debt default warranting initiation of CIRP. Invocation of the Insolvency and Bankruptcy Code in these facts was impermissible, and the challenge to the NCLAT order failed.

Issues: (i) Whether the leasehold lands held by subsidiary companies could be treated as the assets of the corporate debtor in the insolvency process and dealt with under the resolution plans without the lessor's prior consent; (ii) Whether the lessor authority was entitled to levy penal interest, penal charges and time-extension penalties, and whether the resolution plans could be implemented only after recalculation of dues and restoration of the plans; (iii) Whether the corporate veil ought to be lifted on the facts to treat the group companies as one economic entity for the purpose of the resolution process.

Issue (i): Whether the leasehold lands held by subsidiary companies could be treated as the assets of the corporate debtor in the insolvency process and dealt with under the resolution plans without the lessor's prior consent.

Analysis: The subsidiary companies were separate legal entities, but the Court found that the factual matrix showed that the corporate debtor was the real driving force behind the projects. The lease deeds, the consortium arrangement, the role of the special purpose company, the development agreements and the conduct of the parties showed that the projects were being executed by the corporate debtor, while the subsidiaries were only holding companies in form. The relevant statutory scheme under the insolvency law did not justify allowing the resolution plans to transfer the lessor's land contrary to the lease conditions, but the Court held that the narrow corporate structure could not defeat the substance of the transaction where the group entities functioned as one concern.

Conclusion: The issue was answered in favour of treating the projects as part of the corporate debtor's insolvency resolution on the facts of the case, subject to the lessor's dues being protected and the land not being sold free of the lessor's rights.

Issue (ii): Whether the lessor authority was entitled to levy penal interest, penal charges and time-extension penalties, and whether the resolution plans could be implemented only after recalculation of dues and restoration of the plans.

Analysis: The Court held that the lessor had remained inactive for long periods despite repeated defaults and repeated knowledge of the stalled projects. It had not monitored the development with due diligence, had not promptly pursued recovery, and had contributed materially to the unresolved state of the projects. For that reason, the Court agreed that penal interest, penal charges and time-extension penalties could not be insisted upon at this stage. At the same time, the principal dues of the lessor remained recoverable. The Court also balanced the interests of homebuyers and the successful resolution applicants by restoring the resolution plans and directing payment of the recalculated principal dues over a fixed period without burdening the buyers.

Conclusion: The lessor's claim to penal interest, penal charges and time-extension penalties was rejected, but its principal dues were directed to be recalculated and paid under the restored resolution plans.

Issue (iii): Whether the corporate veil ought to be lifted on the facts to treat the group companies as one economic entity for the purpose of the resolution process.

Analysis: The Court applied the principle that the corporate veil may be lifted where associated companies are inextricably connected and the corporate form is being used in a manner that defeats the real substance of the arrangement. The record showed common control, majority ownership, common management features, and actual execution of the projects by the corporate debtor. In that setting, the subsidiaries could not be treated as entirely independent for the limited purpose of the insolvency resolution. The Court therefore disagreed with the view that the group structure prevented the resolution process from encompassing the project lands and related development rights.

Conclusion: The corporate veil was held liable to be lifted on the facts, and the group companies were treated as part of one economic concern for the limited purpose of the resolution process.

Final Conclusion: The resolution plans were restored, the lessor's principal dues were preserved but penal components were disallowed, and the appeals were disposed of by granting substantive relief to the successful resolution applicants while protecting the lessor's recoverable principal claims and the interests of the allottees.

Ratio Decidendi: Where group companies are in substance one economic concern and the corporate structure is used to control and execute the same projects, the corporate veil may be lifted in insolvency proceedings to give effect to a workable resolution, while protecting the rights of the lessor to recover lawful principal dues but not penal levies arising from prolonged inaction.

Issues: (i) whether the period of limitation for filing the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 has to be reckoned from 06.12.2016 or 06.12.2017, (ii) whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is within limitation, and (iii) whether an admission of debt by an Interim Resolution Professional amounts to acknowledgment of liability under Section 18 of the Limitation Act, 1963.

Issue (i): whether the period of limitation for filing the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 has to be reckoned from 06.12.2016 or 06.12.2017

Analysis: An application under Section 7 is governed by Article 137 of the Limitation Act, 1963, and the limitation period of three years begins when the right to apply accrues. In insolvency matters, that accrual is tied to the date of default, namely the date on which the corporate debtor first fails to discharge the repayment obligation. On the admitted facts, the accounts were classified as non-performing assets on 06.12.2016. The right to invoke Section 7 therefore accrued on that date, and not on any later date.

Conclusion: The limitation period was to be reckoned from 06.12.2016.

Issue (ii): whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is within limitation

Analysis: The three-year limitation from 06.12.2016 would ordinarily expire on 06.12.2019. Although periods were excluded because of prior insolvency proceedings and the Covid-related exclusion of limitation, the petition was filed only on 23.09.2024. Even after excluding the relevant periods, the filing remained beyond the surviving limitation window. The petition was therefore time-barred.

Conclusion: The petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 was not within limitation.

Issue (iii): whether an admission of debt by an Interim Resolution Professional amounts to acknowledgment of liability under Section 18 of the Limitation Act, 1963

Analysis: A valid acknowledgment must be made by the party against whom the right is claimed, before expiry of limitation, and must evince a clear intention to admit an existing liability. The Interim Resolution Professional performs only an administrative function in collation of claims and has no adjudicatory power. Admission of a claim during insolvency proceedings is only an entry or recording of the claim and does not amount to a conscious acknowledgment of liability by the corporate debtor. In any event, such admission cannot revive a limitation period that has already expired, and the alleged admission here was not within the subsisting limitation period.

Conclusion: Admission of debt by the Interim Resolution Professional did not constitute acknowledgment of liability under Section 18 of the Limitation Act, 1963.

Final Conclusion: The insolvency application was barred by limitation, and the orders admitting the petitions and affirming such admission could not be sustained.

Ratio Decidendi: For a Section 7 insolvency application, limitation runs from the date of default under Article 137 of the Limitation Act, 1963, and an Interim Resolution Professional's administrative admission of claims does not amount to acknowledgment of liability under Section 18 of that Act or extend an expired limitation period.

Issues: (i) Whether corporate guarantees executed by the corporate debtor constituted financial debt under the Insolvency and Bankruptcy Code, 2016. (ii) Whether the appellants' claims were liable to be rejected for non-submission or improper verification of documents. (iii) Whether the concurrent findings of the tribunals warranted interference in second appeal.

Issue (i): Whether corporate guarantees executed by the corporate debtor constituted financial debt under the Insolvency and Bankruptcy Code, 2016.

Analysis: A liability arising from a guarantee for money borrowed against payment of interest falls within the concept of financial debt, and a guarantor incurs coextensive liability with the principal borrower. The execution of the corporate guarantees was admitted by the corporate debtor, and the record showed that the guarantees were publicly disclosed and remained available to the lenders. The guarantees were executed before the account was treated as NPA on the relevant reckoning under the RBI prudential norms, so their timing did not invalidate the claim.

Conclusion: The corporate guarantees constituted financial debt, and the appellants were entitled to be recognised as financial creditors.

Issue (ii): Whether the appellants' claims were liable to be rejected for non-submission or improper verification of documents.

Analysis: The resolution process regulations permitted the insolvency professional to seek substantiating material and verify claims. The corporate debtor had admitted execution of the guarantees, the security trustee had confirmed custody of the executed and stamped guarantees, and the resolution professional had inspected them at New Delhi. The later production of the guarantees before the appellate tribunal could be taken into account in continuation of the original proceedings. The objection based on stamping also failed because non-stamping or improper stamping is a curable defect and does not by itself render the instrument void or unenforceable.

Conclusion: The rejection of the appellants' claims on the grounds of non-submission, verification, or stamping was unsustainable.

Issue (iii): Whether the concurrent findings of the tribunals warranted interference in second appeal.

Analysis: Interference in second appeal is justified where the findings are perverse. The tribunals had rejected the claims notwithstanding the admitted execution of the guarantees, the supporting material, and the applicable legal position on financial debt and stamping. Those findings were held to be manifestly perverse and legally unsustainable.

Conclusion: The impugned findings warranted interference.

Final Conclusion: The impugned orders were set aside, the appellants were recognised as financial creditors, and the matter was directed to proceed with reconstitution of the committee of creditors in accordance with law.

Ratio Decidendi: A corporate guarantee securing a borrowing can constitute financial debt, and objections based on non-disclosure, verification, or insufficient stamping do not defeat enforcement where execution is admitted and the defect is curable; perverse concurrent findings may be interfered with in second appeal.

Issues: Whether a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 can be used to enforce a final money decree and recover a disputed decretal amount against a solvent corporate debtor.

Analysis: The operative question was not whether any liability existed in the abstract, but whether the insolvency forum could be invoked as a substitute for execution of a civil decree. The Court reiterated that the Insolvency and Bankruptcy Code is a revival and resolution statute, not a recovery legislation. Where a decree holder has the ordinary and efficacious remedy of execution, and the real dispute concerns the computation and quantification of the amount due, resort to Section 7 proceedings is impermissible if it functions only as a coercive debt recovery tool. The Court also noted the respondent's inconsistent stands on the amount due, the pendency of execution-related proceedings before the High Court, and the solvent and functioning nature of the appellant.

Conclusion: The Section 7 proceedings were an abuse of the insolvency process and could not be maintained as a recovery mechanism for a money decree. The impugned admission order was unsustainable and the dismissal of the Section 7 application was restored.

Ratio Decidendi: Insolvency jurisdiction under Section 7 of the Insolvency and Bankruptcy Code, 2016 cannot be invoked as a substitute for execution of a money decree, particularly where the dispute is essentially about quantification of the decretal amount and the corporate debtor is not shown to be genuinely insolvent.

Issues: (i) Whether an appeal against admission of a corporate insolvency application could be filed in the name of the corporate debtor by a suspended director after appointment of the interim resolution professional and after expiry of the statutory limitation period.

Analysis: Once an interim resolution professional is appointed on admission of an application under the Insolvency and Bankruptcy Code, the management of the corporate debtor vests in that professional. A suspended director therefore has no authority to prosecute an appeal in the name of the corporate debtor. An appeal so filed is not merely defective but is incompetent in its inception. The statutory scheme of limitation for appeals under the Code permits only the prescribed period and a limited condonable extension, and that time discipline cannot be bypassed by later changing the cause title so as to transform an incompetent filing into a maintainable appeal after limitation has expired.

Conclusion: The appeal in the name of the corporate debtor was not maintainable, could not be converted into a valid appeal by amendment after expiry of limitation, and was rightly dismissed.