AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 876
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....cial Government Pleader, appearing for respondent Nos. 1 to 3 and 5; Dr. Abhishek Manu Singhvi, learned Senior Counsel and Sri Gyanendra Kumar Seni, learned counsel appearing through video conference for Sri Rajesh Maddy, learned counsel for respondent No. 4 and Sri N. Bhujanga Rao, learned Deputy Solicitor General of India appearing for respondent No.7, and perused the record. 2. This Writ Appeal, preferred under Clause 15 of the Letters Patent, is directed against the order dated 20.11.2025 passed by the learned Single Judge in W.P.No.30461 of 2025, whereby the writ petition filed by the appellant came to be dismissed with costs of Rs. 10,00,000/-. The writ petition was instituted challenging the decision of the Empowered Committee (Tourism) of the State of Telangana taken in its meeting dated 22.09.2025, whereunder a No Objection Certificate (NOC) was granted in favour of the 4th respondent, being the successful resolution applicant under the Insolvency and Bankruptcy Code, 2016 (for short 'the IBC') for change in shareholding and control of the project company, M/s. Golden Jubilee Hotels Private Limited, subject to certain terms and conditions, to facilitate implementation o....
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....initiated proceedings under Section 7 of the IBC before the National Company Law Tribunal (NCLT), Hyderabad Bench, and the Corporate Insolvency Resolution Process (CIRP) against GJHPL was admitted by order dated 27.02.2018. 7. In the course of the CIRP, the 4th respondent, being the successful resolution applicant, submitted a resolution plan offering, inter alia, financial settlement to the creditors, which came to be approved by the Committee of Creditors (CoC) with a voting share of 68.26%, and was thereafter approved by the NCLT, Hyderabad Bench, vide order dated 07.02.2020. A material and express condition of the said resolution plan was that its implementation was contingent upon obtaining prior written consent of the State Government, including respondent Nos. 1 and 5 (YATC and Shilparamam Society), for effecting a change in shareholding and control of GJHPL, which was stipulated as a condition precedent to the plan coming into force. 8. The appellant, aggrieved by the prospect of such change in control, instituted W.P.No.17129 of 2020 before this Court seeking to restrain the State from granting such consent, placing reliance on the provisions of the Telangana Infrast....
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....) Pte., Ltd., (M/s. Blackstone) and current operator ie., East India Hotels (EIH) to continue to operate tower I and tower 2, till the end of lease period. Separate agreement can be worked out between M/s. BREP Asia II Indian Holding Co. (NQ) Pte., Ltd., (M/s. Blackstone) and EIH regarding the operations part. 7) All court cases in which M/s. BREP Asia II Indian Holding Co. (NQ) Pte., Ltd., (M/s. Blackstone) has a claim against Government of Telangana and TGTDC, shall be withdrawn. Likewise, court cases pertaining to matters settled in this agreement will be withdrawn by the Government of Telangana. 8) Post NCLT judgement, the escrow account, where surplus funds are deposited by the operator has accumulated Rs. 240 crores as on August 2025. TGTDC will file claims before the NCLT for its unsettled dues ie. Rs. 69.83 crores which is the Interest on the pending Lease Rental & Annual Development Premium (ADP). 10. Aggrieved by the aforesaid decision of the Empowered Committee granting consent to the 4th respondent and permitting change in control of the project company, the appellant instituted the underlying W.P.No.30461 of 2025 challenging the same as being arbit....
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....the project, thereby conferring an unjustified and preferential treatment. iv) That the project in question constitutes valuable State largesse and, therefore, any transfer or reallocation thereof is required to be undertaken through a transparent, fair, and competitive process consistent with constitutional principles. It was contended that the State has, in the present case, bypassed the established norms of public procurement and has effectively awarded the project to the 4th respondent through private negotiations arising out of insolvency proceedings, without any public tender or competitive bidding, thereby violating settled principles governing distribution of State largesse under Article 14 of the Constitution. v) That the proposed transfer of 100% shareholding of GJHPL to the 4th respondent, which is a foreign entity, would result in 100% Foreign Direct Investment (FDI) in a fully developed and operational hotel project, which is impermissible under the extant Consolidated FDI Policy of India. Learned counsel submitted that while FDI may be permissible in construction and development of new hotel projects, the same is not allowable in respect of already c....
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....on precedent for its implementation. Therefore, the decision of the Empowered Committee dated 22.09.2025 is in complete conformity with the terms of the resolution plan and constitutes a valid exercise of contractual and statutory discretion by the State. It was further submitted that the conditions imposed by the State, including financial and operational stipulations, are in the nature of a commercial settlement of pre-existing disputes and liabilities, and fall squarely within the domain of 'commercial wisdom' of the Committee of Creditors and the State, which is not amenable to judicial review. iv) That the approved resolution plan does not mandate any specific operator, and the issue of operation of the hotel is left to the commercial discretion of the successful resolution applicant. The decision to retain M/s. EIH Ltd. as the operator is based on operational and commercial considerations to ensure continuity of the hotel as a going concern without disruption. It was further contended that the position of the technical member post-CIRP is not comparable to that of the Lead Developer, whose rights stand subsumed and extinguished by operation of law under the insolvenc....
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....tained in any other law for the time being in force or any instrument having effect by virtue of any such law. 15. The legal position with regard to the primacy of the IBC is no longer res integra. The Hon'ble Supreme Court, in Innoventive Industries Ltd. v. ICICI Bank & Another (2018) 1 SCC 407, has held that the non-obstante clause, in the widest terms possible, is contained in Section 238 of the IBC, so that any right of the Corporate Debtor under any other law cannot come in the way of the IBC, Further, in Ghanashyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Limited (2021) 13 SCR 737, the Apex Court while interpreting the issue of binding effect of resolution plan upon the creditor, has held as under: 58. Bare reading of Section 31 of the I&B Code would also make it abundantly clear, that once the resolution plan is approved by the Adjudicating Authority, after it is satisfied, that the resolution plan as approved by CoC meets the requirements as referred to in Sub-section (2) of Section 30, it shall be binding on the Corporate Debtor and its employees, members, creditors, guarantors and other stakeholders. Such a provision is necessitated si....
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.... once the corporate debtor underwent insolvency resolution and its ownership and control stood transferred in accordance with the approved resolution plan, the rights in relation to the project necessarily followed such change, and no independent or surviving claim in respect thereof can be asserted by the erstwhile shareholders dehors the corporate debtor. Thus, the role of the State, cannot be equated with that of a sovereign authority making a fresh grant, but must be understood as that of a contracting party acting in furtherance of a binding statutory resolution process. Issue regarding the plea of violation of Article 300A of the Constitution of India 20. The appellant's submission that its alleged "accrued proprietary rights" have been taken away without payment of compensation, thereby violating Article 300A of the Constitution of India is erroneous. The appellant did not possess any independent or direct right in respect of the leasehold property or the project in question. Its rights, if any, were derivative in nature and flowed solely from its shareholding in the corporate debtor, namely GJHPL. 21. It is relevant to note that the extinguishment or dilution of th....
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....ded within the framework of the plan itself. In such case, the decision of the 4th respondent to retain M/s. EIH Ltd. as the operator, as part of a transitional or continuing arrangement, cannot be construed as a modification of the resolution plan, but is rather a manifestation of commercial prudence aimed at ensuring continuity of the corporate debtor as a going concern. 26. Insofar as the allegation of discrimination under Article 14 is concerned, this Court is unable to accept the contention that the appellant and M/s. EIH Ltd. are similarly situated entities. The appellant, being the Lead Developer and majority shareholder, exercised control over the affairs of the corporate debtor, and its position stood extinguished as a consequence of the CIRP. M/s. EIH Ltd., on the other hand, was a minority shareholder and functioned primarily as a technical and operational service provider under a distinct contractual arrangement. Post-CIRP, its role is confined to that of an operator, without any controlling interest in the management or financial affairs of the corporate debtor. In such circumstances, the differential treatment, if any, is founded on intelligible differentia having ....
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....t multiple stages, sought to challenge the CIRP and its consequential outcomes, including proceedings before the Adjudicating Authority, the Appellate Tribunal, this Court in W.A.No.1135 of 2023 in W.P.No.17129 of 2020, and thereafter before the Hon'ble Supreme Court in SLP(C) No.22186 of 2024. The present proceedings arise from a challenge to the decision dated 22.09.2025 of the Empowered Committee, which is in furtherance of, and flows directly from, the implementation of the resolution plan approved under the IBC. 31. The fundamental question as to whether the State is competent to grant its consent for change in shareholding of GJHPL notwithstanding the provisions of the TIDE Act, stands concluded against the appellant in the judgment rendered in W.P.No.17129 of 2020, which has attained finality upon affirmation up to the Hon'ble Supreme Court. The subsequent decision dated 22.09.2025 does not give rise to an independent or fresh cause of action, but is merely a consequential step in furtherance of the approved resolution plan. Permitting the appellant to re-agitate the very same issues under the guise of a subsequent development would amount to an abuse of the process of la....