Authority: Supreme Court of India, Civil Appellate Jurisdiction

Order Date: September 03, 2026

Case Overview

  • Parties: The Authorized Representative for Granite Gate Properties Private Limited (Ms. Rakesh Verma) as appellant in Civil Appeal No. 3132 of 2026; New Okhla Industrial Development Authority (NOIDA) and others as respondents; and NOIDA as appellant in Civil Appeal No. 4207 of 2026.
  • Background: Granite Gate Properties Private Ltd obtained perpetual leases from NOIDA for two plots in Sector 100 (project “Lotus Boulevard”) and Sector 110 (project “Lotus Panache”) to develop high‑rise residential apartments. The developer defaulted, was declared a Corporate Debtor, and a Committee of Creditors (CoC) comprising home‑buyers approved a Resolution Plan. SMV Agencies Private Ltd was appointed as the Successful Resolution Applicant (SRA).
  • Procedural History: Numerous interim applications were filed before the NCLT, including an IA by the Resolution Professional to approve the SMV Agencies plan. The NCLAT directed that time‑extension charges under the lease deeds be treated as CIRP costs for up to three years. Both the Authorized Representative (AR) and NOIDA appealed the NCLAT order.
  • Core Dispute: Whether the lease‑related time‑extension (penalty) charges—initially levied for the periods Dec 2016‑Dec 2017 (4%), Dec 2017‑Dec 2018 (5%), and Dec 2018‑Jan 10 2019 (6%)—should be classified as CIRP costs and borne by the SRA/home‑buyers. NOIDA further claimed that charges beyond the three‑year limit, as per its office order dated 18‑Oct‑2019 (and earlier order dated 18‑Jun‑2015), extending up to the 10th year at rates of 7‑10% for the first four years and 1% thereafter, should also be treated as CIRP costs.
  • Arguments: Counsel for the AR argued that the charges are penal in nature, not incurred by the Resolution Professional, and should not be part of CIRP costs. NOIDA contended that without payment of these charges the projects could not continue, and therefore the charges must be treated as CIRP costs. The SRA, through counsel, emphasized that the resolution plan caps contingent protection at the overlap period balance and any cost above Rs 3 crores must first be recovered from allottees of towers 17/18/19 of Lotus Panache as a super‑area charge.

Final Outcome

  • The Court held that the penalty charges imposed by NOIDA are not payable by the home‑buyers or the SRA, as they arise from the default of the corporate debtor and not from the continuation of the project.
  • Accordingly, the directions to treat the time‑extension charges as CIRP costs were set aside and the impugned order was modified to the same effect.
  • NOIDA’s appeal seeking inclusion of penalty charges beyond the three‑year period up to the 10th year was rejected.
  • Civil Appeal No. 3132 of 2026 (by the AR) was allowed; Civil Appeal No. 4207 of 2026 (by NOIDA) was dismissed.
  • Any pending applications, if any, were ordered to stand disposed of.

Topics: Insolvency, Real Estate