Authority: Madras High Court

Order Date: 21-08-2026

Case Overview

  • The appellant, Vanbey Holdings Private Limited (decree holder), filed Original Side Appeals (OSA Nos. 219, 220 of 2020; 293, 294 of 2020; 99, 258, 260 of 2021) against a consortium of respondents including Green Gardens Private Limited, Gemini Arts Private Limited, The City Centre Point Registered Partnership Firm, and several individual directors.
  • The dispute originates from a Builder's Agreement dated 17‑09‑1987 for purchase of commercial space (the “Execution Petition Schedule Property”). Respondents 1‑3 filed a civil suit (C.S. No. 1338 of 1992) seeking to declare the agreement null and void, resulting in a Consent Compromise Decree dated 13‑09‑1993.
  • The decree created a statutory charge under Section 55(6) of the Transfer of Property Act and provided that failure to complete construction would render the sums paid by the appellant refundable with interest, and the decree could be executed as a money decree.
  • Because the respondents failed to comply, the appellant initiated execution proceedings (E.P. No. 194 of 2004). An attachment order was passed on 19‑04‑2005 and a prohibitory order on 21‑04‑2005, barring the judgment debtors and any third parties from alienating the attached property.
  • Multiple auction attempts for the schedule property were made between 10‑08‑2011 and 25‑07‑2018, but were allegedly thwarted by the respondents through applications, appeals, third‑party intervenors, and alleged suppression, fabrication, and forgery of documents.
  • The respondents later initiated insolvency proceedings before the National Company Law Tribunal (NCLT) – C.P. Nos. 709 & 710 of 2018 – invoking a moratorium under Section 14 of the Insolvency & Bankruptcy Code (IBC). The appellant contended that the NCLT orders were obtained by fraud, collusion, and concealment of material facts.
  • Central to the fraud allegations were (i) an unregistered loan agreement dated 19‑06‑2009 purportedly creating a contingent right over the schedule property, and (ii) unregistered, insufficiently stamped mortgage deeds dated 01‑04‑2015, 15‑04‑2016, and a memorandum of deposit of title deeds dated 25‑05‑2018, all allegedly executed in violation of the 2005 prohibitory order.
  • The appellant filed contempt applications (A.No. 6897 & 6898 of 2018) under Article 215 of the Constitution and Section 2(b) of the Contempt of Courts Act, seeking punishment of the respondents and a declaration that the NCLT orders were a nullity.
  • The learned single judge, on 26‑05‑2020, held respondents 2‑5, 7‑8 guilty of wilful disobedience, declared the loan agreement and the three mortgage documents illegal, null and void, and imposed fines and potential imprisonment.
  • The present Common Judgment (21‑08‑2026) reviews the OSAs and confirms the earlier findings.

Final Outcome

  • All Original Side Appeals (OSA Nos. 219, 220 of 2020; 293, 294 of 2020; 99, 258, 260 of 2021) are dismissed; the earlier order dated 26‑05‑2020 is affirmed.
  • The loan agreement dated 19‑06‑2009 and the mortgage deeds dated 01‑04‑2015, 15‑04‑2016, and the memorandum of deposit dated 25‑05‑2018 are declared illegal, null and void.
  • Respondents 2 and 3 are each fined Rs 2,000; Respondents 4, 7 and 8 are each fined Rs 2,000; Respondent 5 (K. Bharathi) is fined Rs 1,000. Failure to pay within two weeks triggers simple imprisonment of 15 days for respondents 2‑4, 7‑8 and 7 days for respondent 5.
  • Respondent 5 is directed to deposit the original title deeds of the attached property with the Registrar General of the Court within two weeks; the deeds shall be held in custodia legis.
  • The court orders that the four original documents listed in the letter dated 22‑02‑2023 from the mortgagee (9th respondent) be kept in safe custody by the Joint Registrar (O.S.) and not released without further court orders.
  • The auction sale proceedings remain deferred until the NCLT determines the maintainability of C.P. Nos. 709 & 710 of 2018 and any incidental matters.
  • Parties are free to re‑apply after the NCLT resolves the IBC proceedings; no costs are awarded.

Topics: Contempt of Court, Insolvency & Bankruptcy, Real Estate Litigation