Authority: Supreme Court of India

Order Date: 15-10-2026

Case Overview

  • Petitioner: Pratul Kumar Singh (Bankruptcy Trustee) represented by Senior Counsel Mr. Shyam Divan and a team of advocates.
  • Respondents: Ramesh Mansukhani & Ors., including respondent No.1 (purchaser of the property), respondent No.4 (Bankrupt), respondent Nos.2 & 3 (secured creditors), and others.
  • Underlying dispute: Possession of the subject property (3rd, 4th and 5th Floors of Aadhya Building, Jaihind Cooperative Housing Society Ltd., Plot No.43, N.S. Road No.10, Vile Parle (West), Mumbai) after a sale by private treaty on 31‑03‑2025 for Rs 25.07 crores, of which Rs 6.26 crores had been paid.
  • High Court Order (09‑10‑2026): Directed the Bankruptcy Trustee (respondent No.6) to hand over physical possession to the petitioner by 12‑10‑2026, prohibited creation of third‑party rights, allowed only minor repairs, and warned against obstruction.
  • Writ petition reliefs sought: (a) Declare interim moratorium under Section 124 IBC ultra‑vires; (b) Declare moratorium not applicable to Sale Notice dated 12‑Mar‑2025; (c) Various orders directing respondents to ensure possession, assist Court Commissioner, exclude litigation period from Rule 9(4) Security Interest Enforcement Rules, protect rights under Sale Certificate dated 22‑Jul‑2026; (d) Injunctive restraint on actions pursuant to the impugned DRT order dated 25‑Apr‑2025; (e) Costs and other ancillary reliefs.
  • Key statutory references: Section 128 & 154 IBC (vesting of estate in Bankruptcy Trustee), Regulation 31 of the Insolvency and Bankruptcy Board of India (IBBI) Regulations 2019 (procedure for secured creditor’s realisation), SARFAESI Act 2002 Section 13(2) and amended Section 13(8) (right of redemption).
  • Counsel arguments:
  • Senior Counsel Mr. Shyam Divan argued the High Court lacked jurisdiction as the matter should be before NCLAT/NCLT, and that the Bankruptcy Trustee was appointed on 24‑04‑2026 (order communicated on 29‑04‑2026), vesting title immediately under Section 154.
  • Mr. S. Niranjan Reddy highlighted non‑compliance with Regulation 31 IBBI, asserting the secured creditor must intimate price to the Trustee before realisation.
  • Respondent No.1’s counsel (Mr. Maninder Singh) claimed the purchaser had paid the full consideration per High Court order dated 21‑07‑2026 and was entitled to retain possession.
  • Respondent Nos.2 & 3 (secured creditors) argued they held mortgage interest and that the purchaser had a right of first refusal.
  • Counsel for respondent No.4 (Bankrupt) contended the SARFAESI amendment removed the right of redemption once the first auction notice was issued, even if the auction failed.
  • Supreme Court observations:
  • Prima facie, with vesting of the property in the Bankruptcy Trustee on 24‑04‑2026 under Sections 128 & 154 IBC, title had not passed to purchaser respondent No.1; therefore the High Court could not lawfully direct possession to the purchaser.
  • The amendment to SARFAESI Act does not extinguish the right of redemption where the purchaser has defaulted on the balance consideration.

Final Outcome

1. The Supreme Court set aside the Bombay High Court’s interim order directing possession to respondent No.1.

2. Respondent No.1 is directed to hand over physical possession of the subject property to the Bankruptcy Trustee petitioner on or before 30‑10‑2026.

3. The High Court is instructed to dispose of the writ petition itself within twelve weeks from the date of this order.

4. All pending applications, including IA No. 321824/2026 and IA No. 321838/2026, are disposed of.

5. The writ petition will be decided independently of any observations made in the High Court’s order or this Supreme Court order.

Topics: Insolvency, Property Possession