Supreme Court Upholds Joint Insolvency Petition by Real Estate Allottees, Dismisses Appeals

A Bench of Justices Sanjay Kumar and K. Vinod Chandran heard appeals arising from an NCLAT judgment which had dismissed challenges to an NCLT order admitting a company petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) against two corporate debtors involved in a commercial real estate project.

The Court held that the company petition filed by allottees was maintainable and that the petitioners proved both the existence of financial debt and corresponding default. The Bench noted that the statutory threshold in the second proviso to Section 7(1) — requiring a petition by not less than 100 allottees (or 10% of allottees, whichever was lesser) — had to be assessed as on the date of presentation of the petition, observing that “the crucial date for ascertaining whether the threshold is adequately met is the date of filing of the application and not at the time of its hearing or admission.” The Court, in its reasoning, observed: “On the above analysis, we hold that the company petition instituted under Section 7 of the Code against both the corporate debtors by the allottees of 103 units was maintainable on all counts. The petitioning allottees duly established their financial debt and also the default in connection therewith, inasmuch as the units for which they had paid valuable consideration were not made ready and delivered to them till date. We, accordingly, find no error having been committed either by the NCLT in admitting the company petition or by the NCLAT in confirming the same in appeal.” The Court dismissed Civil Appeal Nos. 13779, 13812 and 13628 of 2025 and declined to interfere with the NCLAT’s rejection of an offer to deposit ₹15.62 crores made after judgment was reserved.

Background The dispute arose from a composite project launched in 2005 comprising a hotel, a mall and the Grand Venezia Commercial Tower. 141 allottees of commercial office spaces filed Company Petition IB (IBC) No. 646/PB/2021 before the NCLT, alleging that the developer(s) had failed to complete construction, obtain final completion/occupancy certification from the Uttar Pradesh State Industrial Development Authority (UPSIDA), and deliver possession as contractually required; they claimed status as financial creditors and sought initiation of the corporate insolvency resolution process (CIRP). The NCLT found that, accounting for joint allottees, the petition was filed by allottees of 103 units and that receipts evidenced payments by the allottees; it relied on the RTI reply from UPSIDA showing absence of a final completion certificate and concluded default.

The corporate debtors contended that parts of the project were complete, that several allottees had taken possession or been settled, and that the separate corporate entities could not be proceeded against jointly. The NCLT admitted the petition against both entities, observing the interlinkage between them and relying on precedents permitting consolidated proceedings where companies were closely connected. The NCLAT upheld the admission, referred to earlier decisions such as Edelweiss Asset Reconstruction Co. and Mist Avenue, and relied on contemporaneous material — the IRP’s status report, an NCLAT-appointed Observer’s site report and UPSIDA’s report — which indicated incomplete construction, absence of basic amenities and lack of tripartite sublease deeds. The Court examined NCLT Rules (Rule 28) and held that amendments to the cause-title during the petition’s return-and-refiling process did not vitiate the petition, relying on the principle that registration occurred only after defects were cured. An interlocutory order of the NCLAT dated 07.12.2023 had earlier restrained further steps and prohibited creation of third-party interests; an interlocutory application by Satinder Singh Bhasin to deposit funds after judgment was reserved was rejected by the NCLAT and the Supreme Court declined to intervene. All pending applications were dismissed.

Case Details: Case No.: Civil Appeal No. 13628 of 2025; Civil Appeal No. 13779 of 2025; Civil Appeal No. 13812 of 2025 (reported as 2026 INSC 104) Case Title: Satinder Singh Bhasin v. Col. Gautam Mullick & Ors. Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]