Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Order Date: 05 October 2026

Case Overview

The NCLAT heard two interlocutory applications (I.A. No. 3274 of 2026 and I.A. No. 5865 of 2026) in the main appeal CA (AT) (Ins) No. 518 of 2025. The appeal challenges the NCLT order dated 04 March 2025 that admitted ATS Infrabuild Pvt. Ltd. (Corporate Debtor) into Corporate Insolvency Resolution Process (CIRP) on an application filed by IDBI Trusteeship Services Ltd. under Section 7 of the IBC.

I.A. No. 3274 of 2026 was filed by Mr. Rajinder Singh, claiming ownership of 8.137 acres of land in the Casa Espana Phase-II Project in Sector 121, SAS Nagar, Mohali, Punjab. He sought to intervene in the appeal and prayed for: (a) exclusion of his land from the assets of the Corporate Debtor; (b) exclusion of the Casa Espana Phase-II project from the CIRP; (c) setting aside the NCLT order; (d) remanding the matter to the NCLT for fresh consideration; and (e) restoration of his original title to the land.

His counsel, Mr. Ramji Srinivasan, argued that he had entered into a Joint Development Agreement (JDA) and executed a Power of Attorney (POA) in favor of the Corporate Debtor on 21 November 2017. However, due to alleged inaction by the developer for over six years, he unilaterally terminated the JDA via a letter dated 24 March 2023 and cancelled the POA via a registered cancellation deed dated 04 May 2023, well before the initiation of CIRP on 04 March 2025. He claimed the suspended board of the Corporate Debtor had acknowledged this termination and even granted him a No Objection Certificate (NOC) via letters dated 24 May 2023 and 26 May 2023 to develop the land with another entity, Glencrest, with whom he had an MOU dated 29 October 2023. He emphasized that no allottee bookings existed for his land parcel and that the financial creditor (IDBI) had wrongly mortgaged his land without his knowledge, a matter already under dispute at the Debt Recovery Tribunal (DRT).

I.A. No. 5865 of 2026 was filed by the Interim Resolution Professional (IRP) of the Corporate Debtor. He prayed for orders to: (a) direct Mr. Rajinder Singh to cease all construction and development activities on the project site; (b) direct him to vacate the property and remove all labor and materials; (c) restrain him from alienating or creating any third-party rights on the land; and (d) direct police assistance to implement the orders.

Counsel for the IRP and the financial creditor, Mr. Arun Kathpalia, argued that the JDA and POA were irrevocable. They cited clauses 2.1, 10.1.7, 10.1.10, and, crucially, Clause 12.2 of the JDA, which stated the landowner shall not revoke the development rights nor be entitled to terminate the agreement for any reason. They argued that a subsequent agreement dated 07 June 2022 between the parties modified the construction timeline, extending it to four years and six months from that date (i.e., until the end of 2026), making the termination in 2023 premature. They contended that the development rights constituted an asset of the Corporate Debtor under the IBC, citing the Supreme Court judgment in Victory Iron Works Ltd. vs. Jitendra Lohia (2023). They further argued that the letters from the Corporate Debtor cited by the landowner as granting NOC were conditional offers requiring the landowner to first settle the proportionate loan of ₹50 crore with the NBFC, and thus did not constitute an unconditional acceptance of the termination.

The Tribunal extensively reviewed the JDA (21.11.2017), the POA (21.11.2017), the addendum agreement (07.06.2022), and the relevant communications. It prima facie agreed with the arguments of the IRP/FC, noting the JDA and POA contained irrevocable clauses. It found that the agreement dated 07.06.2022 effectively extended the timeline for project completion, making the landowner's termination in 2023 potentially invalid. It also noted that the project license from GMADA was initially for 25 acres, combining the land of Shiwalik (17 acres) and the landowner (8 acres), suggesting the lands were intertwined for development purposes.

Final Outcome

The NCLAT disposed of both applications. It permitted Mr. Rajinder Singh to intervene in the main appeal (CA (AT) (Ins) No. 518 of 2025). The intervenor was directed to file a reply within 7 days, and the appellant was given 5 days thereafter to file a rejoinder. The main appeal, along with a connected matter (CA (AT) (Ins) No. 517 of 2025), was expedited and listed for hearing on 28 October 2026. Critically, the Tribunal ordered all parties to maintain the status quo on the subject 8.137-acre land until the disposal of the main appeal. This means no construction, alienation, or creation of third-party rights is permitted on the land pending the final decision.

The Tribunal declined to exclude the land from the CIRP at this stage, reasoning that the IRP needed access to the Corporate Debtor's records (currently hampered by the stay on CIRP) to fully ascertain if any third-party rights (like allottees) had been created on the land under the JDA. The final decision on the asset's status was deferred to the outcome of the main appeal challenging the very admission into CIRP.

Topics: Insolvency Process, Land Ownership Dispute, Irrevocable Contracts