Authority: National Company Law Tribunal (NCLT), Indore Bench, Court No. 1

Order Date: 16 July 2026

Case Overview

This Interlocutory Application (IA 238 of 2025) was filed by Union Bank of India under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, against the Resolution Professional (RP) of JSM Devcons India Pvt. Ltd. The Corporate Debtor, JSM Devcons, was admitted into Corporate Insolvency Resolution Process (CIRP) on 12 April 2019, initiated by financial creditor Daimler Financial Services Pvt. Ltd. Ms. Chaya Gupta is the current Resolution Professional.

The Applicant Bank, a secured financial creditor, had sanctioned a Term Loan of ₹30,00,00,000 (Thirty Crores) to the Corporate Debtor on 05 November 2012. This loan was secured by an equitable mortgage over the entire project land and hypothecation of fixed assets, created via a Memorandum of Deposit of Title Deeds dated 24 November 2012. The account was declared a Non-Performing Asset (NPA) on 30 June 2016.

The Bank's core contention was that the mortgage deed stipulated any sale of plots required its No Objection Certificate (NOC). It argued that sales effected without this NOC were null and void. The Bank identified that out of 607 plots in the project, it had issued Final NOCs for only 3 plots and Provisional NOCs for 208 plots. It specifically noted that of the 35 plots referenced in a prior NCLT order (17 December 2024), only 24 had Provisional NOCs, and 11 had none. The Bank sought directions for the RP to reject the claims of plot buyers without NOCs, declare those claims void, and dismiss their applications for plot exclusion. It also sought an interim restraint on the Committee of Creditors (CoC) from voting on any resolution plan.

The Resolution Professional opposed the application, stating that the sale deeds and registries were executed prior to the CIRP commencement and were thus outside her purview. She emphasized that her role in verifying claims under Section 18(1)(b) of the Code and Regulation 13 of the IBBI (CIRP) Regulations, 2016, was administrative and prima facie in nature, involving categorization as Verified, Partially Verified, or Not Verified. She asserted she lacked the adjudicatory power to decide disputed questions of title, ownership, or the validity of transactions and conveyances.

Final Outcome

The NCLT dismissed the application filed by Union Bank of India. The tribunal held that the reliefs sought would require a final adjudication on disputed questions of title and the validity of registered sale deeds, which is beyond the summary jurisdiction of the NCLT under Section 60(5) and the administrative mandate of the Resolution Professional. It clarified that its earlier order dated 17 December 2024 only granted the Bank an opportunity to file its say on a case-by-case basis regarding plot exclusion and was not an invitation for a blanket order against all plot buyers. The tribunal also refused to restrain the Committee of Creditors from voting on a resolution plan, noting that such an order would impede the time-bound CIRP. All substantive questions regarding the subsistence of the mortgage, the Bank's lien over the plots, and its entitlement under Section 30(2)(b) of the Code were left open for determination in accordance with law.

Topics: Insolvency Resolution, Secured Creditor Rights, Property Title Dispute