Bankruptcy estate vesting—not moratorium—governed the dispute, NCLAT ruled.
The bank balance standing to the personal guarantor’s credit on the bankruptcy commencement date vested in the Bankruptcy Trustee by operation of law. Subsequent withdrawals were therefore unauthorised.
NCLAT also held that jewellery sale proceeds in a bank account are not excluded assets. The protection is confined to specified unencumbered personal ornaments, subject to the Rs. 1 lakh cap under the 2019 Bankruptcy Rules; it does not extend to sale proceeds.
Both appeals were rejected, including the challenge to denial of recall.
Tamil Nadu REAT held that the appellant, which agreed to purchase the remaining 18 flats and vacant land under a 2014 tripartite agreement, was not a promoter under Section 2(zk).
The agreement placed sole responsibility for the 14 flats already sold to the complainants on the original promoter. It did not assign the appellant the original promoter’s project obligations.
TNRERA’s reliance on Sections 15(1) and 15(2), its direction to register and complete the project, and its finding that the project was ongoing were set aside.
Fraudulent initiation of a Section 9 case does not automatically terminate CIRP.
The Supreme Court held that the Adjudicating Authority can recall admission where the debt relied upon as a jurisdictional fact was fraudulently or collusively projected.
But after admission, CIRP becomes an in rem process involving creditors, the RP and the CoC. The original collusive applicant must be excluded; whether the process should continue must be decided afresh after hearing stakeholders.
The NCLAT order ending the entire CIRP was set aside, and the matter was restored to the Adjudicating Authority.
A security interest is not the same as a valid election to realise it outside liquidation.
NCLAT held that a secured creditor must clearly communicate its Section 52 option under Regulation 21A within the prescribed period. Ambiguous Form D entries did not establish that election, and a later email—sent after a Section 230 scheme failed—could not cure the delay.
The Tribunal also held that participation in SCC and the compromise process cannot preserve an uncommunicated option to withdraw secured assets later.
The appeal was dismissed; the hypothecated assets remained part of the liquidation estate.
IBC Laws
Bankruptcy estate vesting—not moratorium—governed the dispute, NCLAT ruled.
The bank balance standing to the personal guarantor’s credit on the bankruptcy commencement date vested in the Bankruptcy Trustee by operation of law. Subsequent withdrawals were therefore unauthorised.
NCLAT also held that jewellery sale proceeds in a bank account are not excluded assets. The protection is confined to specified unencumbered personal ornaments, subject to the Rs. 1 lakh cap under the 2019 Bankruptcy Rules; it does not extend to sale proceeds.
Both appeals were rejected, including the challenge to denial of recall.
Read here: ibclaw.in/nclat-upholds-return-of-withdrawn-bank-f…
By NCLAT-New Delhi, reported at (2026) ibclaw.in 1127 NCLAT.
Bench: Mr. Justice Mohammad Faiz Alam Khan, Mr. Naresh Salecha
Download Mobile App(iOS/Android): ibclaw.in/mobile-app/
#InsolvencyLaw #IBC #Bankruptcy #PersonalGuarantor #NCLAT #InsolvencyProfessionals #CorporateLaw
15 hours ago | [YT] | 0
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IBC Laws
A purchaser is not necessarily a RERA “promoter”.
Tamil Nadu REAT held that the appellant, which agreed to purchase the remaining 18 flats and vacant land under a 2014 tripartite agreement, was not a promoter under Section 2(zk).
The agreement placed sole responsibility for the 14 flats already sold to the complainants on the original promoter. It did not assign the appellant the original promoter’s project obligations.
TNRERA’s reliance on Sections 15(1) and 15(2), its direction to register and complete the project, and its finding that the project was ongoing were set aside.
Read here: ibclaw.in/tamil-nadu-reat-sets-aside-rera-directio…
By REAT-Tamil Nadu(TN), reported at (2026) ibclaw.in 590 REAT.
Bench: Mr. Justice M. Duraiswamy, Mr. K. Babu
Download Mobile App(iOS/Android): ibclaw.in/mobile-app/
#RERA #RealEstateLaw #PropertyLaw #RERAIndia #TamilNaduREAT #LegalNews #HousingLaw
16 hours ago | [YT] | 0
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IBC Laws
Fraudulent initiation of a Section 9 case does not automatically terminate CIRP.
The Supreme Court held that the Adjudicating Authority can recall admission where the debt relied upon as a jurisdictional fact was fraudulently or collusively projected.
But after admission, CIRP becomes an in rem process involving creditors, the RP and the CoC. The original collusive applicant must be excluded; whether the process should continue must be decided afresh after hearing stakeholders.
The NCLAT order ending the entire CIRP was set aside, and the matter was restored to the Adjudicating Authority.
Read here: ibclaw.in/supreme-court-allows-recall-of-fraudulen…
By Supreme Court, reported at (2026) ibclaw.in 654 SC.
Download Mobile App(iOS/Android): ibclaw.in/mobile-app/
#IBC #CIRP #InsolvencyLaw #InsolvencyProfessionals #CorporateLaw #SupremeCourt #Section9
1 day ago | [YT] | 0
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IBC Laws
A security interest is not the same as a valid election to realise it outside liquidation.
NCLAT held that a secured creditor must clearly communicate its Section 52 option under Regulation 21A within the prescribed period. Ambiguous Form D entries did not establish that election, and a later email—sent after a Section 230 scheme failed—could not cure the delay.
The Tribunal also held that participation in SCC and the compromise process cannot preserve an uncommunicated option to withdraw secured assets later.
The appeal was dismissed; the hypothecated assets remained part of the liquidation estate.
Read here: ibclaw.in/nclat-upholds-bar-on-tata-capitals-belat…
By NCLAT-New Delhi, reported at (2026) ibclaw.in 1125 NCLAT.
Bench: Mr. Justice Sharad Kumar Sharma, Mr. Arun Baroka, Mr. Indevar Pandey
Download Mobile App(iOS/Android): ibclaw.in/mobile-app/
#IBC #Insolvency #Liquidation #NCLAT #InsolvencyLaw #CorporateLaw #SecuredCreditor
1 day ago | [YT] | 0
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IBC Laws
No Final Adjudication of PF Interest and Damages Before ICD; No EPFO Claim Allowed in Insolvency
#ibc #insolvency #nclat
8 months ago | [YT] | 0
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