Supreme Court

Justice R.Mahadevan

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JASWINDER SINGH

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LSI-1766-SC-2025-(NDEL)

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HARSHBIR SINGH PANNU AND ANR

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SC: High interest in commercial contracts not ‘unconscionable’; Upholds Arbitral-award allowing 36% compound-interest in bill-discounting dispute

swati.durkar@taxsutra.com — Thu, 04 Dec 2025 13:11:08 +0000

SC: High interest in commercial contracts not ‘unconscionable’; Upholds Arbitral-award allowing 36% compound-interest in bill-discounting dispute swati.durkar@t… Thu, 04/12/2025 - 18:41

Conclusion

SC dismisses appeals challenging Delhi HC judgment upholding the arbitral award passed in a Bill Discounting dispute which arose between BPL Ltd. (Appellant) and Morgan Securities and Credits Pvt. Ltd. (Respondent); Essentially, the primary legal issue revolved around the enforceability of the contractual rate of interest in Clause 4 of the Bill Discounting Agreement, in regard to which the Appellant argued that the interest rate is ‘unconscionable’ and the award contravened Sec. 31(7)(a) of the Arbitration Act and Sec. 80 of the Negotiable Instruments Act, while the Respondent contended that the interest rate is valid in commercial contracts and the arbitral award affirmed by the High Court, ought not to be interfered with; At the outset, Court observes that “Once the parties by mutual consent agreed to a particular rate of interest to be charged and the same is included in the terms of the contract there is no escape thereafter.”; Bench remarks, “Once there is an agreement which provides that the interest shall be at a particular rate the Arbitral Tribunal thereafter is left with no discretion. The Arbitral Tribunal would be bound by the terms of the agreement. Such be the position in law on the principles of interpretation of contract, the clause 4 in the case on hand ought to be interpretated in such a way so as to save the clause rather than to render it invalid on the ground of being opposed to Public policy.”; Further, rejecting the Appellant’s contention that the interest rate of 36% with monthly rest is opposed to public policy and could be said to be unconscionable, SC holds that it is well settled that a contract is a commercial document between the parties, and it must be interpretated in such a manner so as to give efficacy to the contract rather than to invalidate it in the name of public policy, unconscionability etc.; In conclusion, noting that in the instant case, the parties had voluntarily/consciously entered into the bill discounting facility agreement, Court observes that, “The principle of unconscionability is inapplicable to voluntary commercial agreements between parties of equal bargaining strength.”

Decision Summary

Facts:

BPL Display Device Ltd. (BDDL) sold certain goods to BPL Ltd. (Appellant). As there arose some issues of timely payments, the buyer and seller companies viz., BPL and BDDL, together approached Morgan Securities and Credits Pvt. Ltd. (Respondent) for extending a Bill Discounting facility to BDDL, to which the respondent agreed. Accordingly, the Bill Discounting facility was sanctioned.
The facility was approved at a concessional rate of interest i.e., 22.5% per annum payable upfront as against the normal agreed rate of interest, i.e., 36% per annum but in case of default in making payment on its due dates, the concessional rates would stand withdrawn and the normal rate of interest i.e., @ 36% per annum would become payable.
Dispute between the parties arose when a sum of over Rs. 25 cr. against particular Bills of Exchange became due and payable to the Respondent by the Appellant and BDDL, which they defaulted in repaying despite several reminders on Respondent’s behalf.
Upon the dispute being referred to arbitration, the Arbitrator inter alia outrightly rejected the Appellant’s contention that the transaction between the parties is governed by the Usurious Loans Act, 1918, as amended by the Punjab Relief of Indebtedness Act, 1934, by observing that the transaction between the parties was neither a loan nor a debt, rather it was simply in the nature of a commercial transaction wherein BPL and BDDL being ‘traders’, had transacted a deal in the course of their business.
Arbitrator further held that the claimant had failed to prove that damages had been suffered and thus the said issue was decided against the claimant.
Aggrieved by the Award, each of the rival parties instituted an application u/s 34 of the Act before the Delhi HC, where on one hand, the Appellant challenged the Arbitrator’s directions to make payment of the claim to the Respondent, while on the other hand, Respondent challenged the dismissal of its claims against Electronic Research Pvt. Ltd. (ERPL- who stood as surety for repayment of over Rs. 6 cr.). The Appellant’s Sec. 34 application was partly allowed, while the Respondents application was dismissed by the single judge.
Aggrieved further, the Appellant filed an appeal u/s 37(1)(b) of the Act, which was dismissed. A review petition was filed by the Appellant subsequently, which was also rejected by the High Court. Pertinently, on the issue whether the rate of interest was against public policy, HC had held that on a plain and grammatical construction of clauses (ii) and (iii) of Explanation 1 to Section 34(2) of the Act, it is doubtful if the imposition of an exorbitant interest in the background of contemporary commercial practices, would be against the fundamental policy of Indian Law, or against the basic notions of morality or justice.
Delhi HC had further observed that while exorbitant interest rates may be deemed unjust or immoral in certain circumstances, particularly where beneficiaries lack equal bargaining power or suffer from illiteracy, poverty, or ignorance, the present case does not warrant such consideration.
Being dissatisfied with the HC judgment dismissing the Sec. 37 appeal and also the order rejecting the review application, the Appellant approached the Supreme Court with the present appeals.

Appellant’s submissions -

Grant of interest under the Award and Impugned Orders is opposed to public policy in terms of Section 34(2)(b)(ii) of the Arbitration Act read with Section 80 of the Negotiable Instruments Act, 1881.
Award and Impugned Orders are passed in contravention of Section 31(7)(a) of the Arbitration Act which concerns itself with ‘reasonable pendente-lite interest’ and not contractual rate of interest.
Clause 4 of the sanction letter 27.12.2002 is subject to the principle of ‘verba chartarum fortius accipiuntur contra proferentem’ and the effect of a unilateral and one-sided arbitration clauses under the sanction letters.
Interest awarded at 36% per annum is ‘penal interest on penal interest’ and as such, is opposed to public policy.
The Award and Impugned Orders fail to consider the fact that the Respondent’s claims were ex-facie barred by Limitation.

Respondent’s submissions -

No error not to speak of any error of law could be said to have been committed by the High Court in passing the impugned judgment and order.
The four sets of concurrent findings encompass various issues such as the enforceability of the contractual rate of interest, limitation, inapplicability of Sec. 80 of NI ActJoint and Several Liability of Drawer and Drawee, inapplicability of Sec. 64 of the NI Act to the facts of the present case, inapplicability of the Usurious Loans Act, 1918 etc.
It is a settled law that when an arbitral award has been affirmed by the Court u/s 34, and thereafter, by the Court in an appeal u/s 37 then this Court in exercise of its jurisdiction under Article 136 of the Constitution should be slow and loath in disturbing such concurrent findings. Respondent relied on MMTC Ltd. vs. Vedanta Ltd. in this regard.
It is for the first time that the appellant canvassed an entirely new plea i.e., that no specific notice was issued to it by the respondent for withdrawal of the concessional rate of 22.50% p.a. No such plea had been taken either before the arbitrator or in the proceedings or arguments before the Court under Section 34 and Section 37 of the Act, 1996 respectively, and at no point of time the appellant redressed the grievance that the same had caused prejudiced citing alleged lack of such notice.
Withdrawal of a concessional rate of interest or for that matter any other concession for failure to apply with the terms thereof cannot be said to be a penalty. The pendente lite period was utilized by the appellant in diverting various assets and monies to third parties with the intention to take the said assets beyond the pale of a potential enforcement process and because of such conduct the appellant company and its contractors were held guilty of contempt of court on account of wilful violation of the interim restraint order passed by Delhi HC.
In terms of Sec. 31(7)(a) of the Act, the contractual rate of interest held the field for the pre-award period and in a commercial contract between two large corporates no cavil could have been raised with the agreed rate of interest.
The principle of unconscionability is inapplicable to voluntary commercial agreements between the parties of equal bargaining strength, and clauses providing for compounding of interest in commercial contracts voluntarily entered into between the parties are not violative of Public policy.

Court’s Observations -

SC observed that the entire debate revolved around this clause 4 of the Sanction Letters, providing for bill discounting facility, and more particularly, the rate of interest specified therein. Delving into the basic difference between a business loan and bill discounting, in order to meet with the Appellant’s case that the interest rate of 36% with monthly rest is opposed to public policy and could be said to be unconscionable, SC remarked that “The crucial difference is that a bill discounting facility is a short term financing option where a business sells its unpaid invoices to a financial institution for immediate cash, while a business loan is a traditional debt obligation where the business receives a lump sum and is responsible for repaying it with interest.”
High interest rates are prescribed in a contract, relating to a bill discounting facility primarily due to the higher risk profile of the financing, its nature as a short-term unsecured funding source and the need for the financial institution to compensate for the associated costs and potential for non-payment.
“Keeping the fine distinction between a loan and a bill discounting facility in mind, the High Court did well to take the view that the provisions of the Usurious Loans Act, 1918 would not be applicable in the present case. The High Court said so because in the present litigation the commercial transaction was one relating to the bill discounting facility and not a loan. The Usurious Loans Act, 1918 would apply to a loan and not to transaction relating to bill discounting facility.”
Further, perusing Sec. 31(7)(a) and (b) of the Arbitration Act, and referring to its recent decision in HLV Ltd. vs. PBSAMP Projects Pvt. Ltd., SC took a deep dive into the aspect of award of interest by an Arbitrator.
Further, Court went on to determine if penal interest on penal interest is opposed to public policy. At the outset, Court rejected the Appellant’s argument that once the parties enter Sec. 31(7)(a), it would be within the arbitral tribunal’s discretion to include in the sum for which the award is made, interest at such rate as it deems reasonable. Holding that such view is not legally tenable, SC observed that “The language of Section 31(7)(a) of the Act, 1996 is plain and simple. We place emphasis on the words “unless otherwise agreed by the parties”. The words “unless otherwise agreed by the parties” at the beginning of clause (a) qualify the entire provision. Once the parties by mutual consent agreed to a particular rate of interest to be charged and the same is included in the terms of the contract there is no escape thereafter. The party concerned would be bound by the rate of interest as prescribed in the agreement.”
Further, SC stated that Sec. 74 of the Indian Contract Act explicitly bars any liquidated damages to be paid which is in the nature of penalty. However, the Act does not define “penalty”. A clause is considered to be in the nature of penalty if it provides for “a payment of money stipulated as in terrorem of the offending party” or, if the clause's contractual nature is “deterrent rather than compensatory”.
On the other hand, a clause is said to be one of liquidated damages if it is a genuine endeavour by the parties to stipulate the loss arising out of the breach in advance. The nature of the clause would also depend on its construction and the encompassing circumstances during the time of entering into the contract or at the time of doing the material variation in the contract.
In arbitration, the freedom of the parties to define their relationship is the most fundamental principle. Thus, stressing that in arbitration, the freedom of the parties to define their relationship is the most fundamental principle, and since the relationship between the Arbitral Tribunals and courts oscillate between forced cohabitation and true partnership, SC adopts the UK SC’s decision in Cavendish Square Holding BV vs. Talal El Makdessi (Cavendish), opining that it would be a pro-arbitration approach.
Further, setting out the most venerated test for determining penalty clause was propounded by Lord Dunedin in Dunlop Pneumatic Tyre Co., wherein four rules for the construction of liquidated damages were formulated, SC states that however, it is difficult to apply this test when it comes to complex contracts.
Wading through foreign jurisdictions which have embraced Cavendish, like Australia, New Zealand, Malaysia and Germany SC upheld the Respondent’s submission that the agreement was entered into between the parties who were well versed with the law and had the advantage of legal assistance before drafting and entering into the aforesaid agreement.
Court remarked, “Once there is an agreement which provides that the interest shall be at a particular rate the Arbitral Tribunal thereafter is left with no discretion. The Arbitral Tribunal would be bound by the terms of the agreement. Such be the position in law on the principles of interpretation of contract, the clause 4 in the case on hand ought to be interpretated in such a way so as to save the clause rather than to render it invalid on the ground of being opposed to Public policy.”
It is well settled that a contract is a commercial document between the parties, and it must be interpretated in such a manner so as to give efficacy to the contract rather than to invalidate it in the name of public policy, unconscionability etc.
It is equally well settled principle that the terms of the contract executed between two parties, are not open to judicial scrutiny unless the same is arbitrary, discriminatory, mala fide or actuated by bias. The courts should not strike down the terms of a contract because it feels that some other terms would have been fair, wiser or logical.
Thus, Court trashed the Appellant’s plea that the rate of interest or in other words, the clause providing for penalty on penalty is unconscionable, ex-proprietary and contrary to law because at no stage the Appellant had questioned the terms on which the bill discounting facility was extended by the Respondent. SC further quipped, “That apart, having enjoyed those facilities for a long time the appellant cannot turn around and raise an argument that penalty on penalty is opposed to public policy. It must be remembered that the appellant was not in a position of disadvantage vis-à-vis the respondent.”
The fact of the matter is that the appellant had signed the agreement with open eyes and agreed to abide by the terms on which the Bill discounting facility was offered by the respondent. In such circumstances, the doctrine of unconscionable contract cannot be invoked for frustrating the action initiated by the respondent for recovery of its dues.
The Appellant was in need of finance and on its own will and volition approached the respondent for the same and knowingly entered into the bill discounting facility agreement. Had the Appellant abided by the terms and conditions of repayment it could have availed facility of concessional rate as provided in the agreement, however, the Appellant just shut its eyes and declined to make the payment for years together.
“In such circumstances the conditions stipulated in the agreement of compound interest at the rate of 36% monthly rest cannot be termed as burdensome or oppressive in any manner. The grant of pendente lite interest depends upon the phraseology used in the agreement, clauses conferring power relating to arbitration, the nature of claim and dispute referred to the arbitrator, and on what items the power to award interest has been taken away and for which period.”
“The true construction of a commercial contract must depend upon the import of the words used and not upon what the parties choose to say afterwards…The intention of the parties must be ascertained from the language they have used, considered in the light of the surrounding circumstances and the object of the contract. The nature and purpose of the contract is an important guide in ascertaining the intention of the parties.”
SC held that any question as to the unconscionableness of a stipulation contained in an agreement would probably arise for consideration only if it is shown that the relationship between the contracting parties was such that one of them was in a position to dominate the will of the other and that he had made use of such position to obtain an unfair advantage over the other. It is only in cases where both theses conditions are clearly established by the person who seeks to avoid the transaction and the court further finds that the bargain is in itself unconscionable that the impugned provision will be held to be unenforceable on the ground of unconscionableness.
Therefore, Court held that where in a contract under which interest is payable it is agreed between the parties that if such interest be not paid punctually the defaulter shall be liable to pay interest at an enhanced rate, whether from the time of default or from the time when interest first became payable under the contract such agreement does not come within Section 74 of the Indian Contract Act, and is to be construed according to the intentions of the parties as expressed therein and not as a stipulation for a penalty. “Such agreement is to be enforced according to its terms, unless it be found to have been when made unconscionable or fraudulent.”

Conclusion -

The arbitral tribunal rightly rejected the contention canvassed on behalf of the appellant as affirmed by the High Court in Section 34 and Section 37 proceedings respectively that the transaction between the parties is governed by the Usurious Loans Act, 1918 as amended by the Punjab Relief of Indebtedness Act, 1934.
The Arbitral Tribunal and the High Court rightly returned a finding that the transaction between the parties was neither a loan nor a debt, rather it was simply in the nature of a commercial transaction.
The arbitral tribunal including the High Court rightly held that the terms of payment of interest as mutually agreed upon by the parties vide sanction letters cannot be said to be unconscionable, arbitrary or excessive in case of nonpayment after the stipulated due date.
The discretion to grant interest would be available to the Arbitral Tribunal under clause (a) of sub section (7) of the Section 31 of the Act, 1996 only when there is no agreement to the contrary between the parties. When the parties agree with regard to any of the aspects covered in clause (a) of sub section (7) of the Section 31 of the Act, 1996, the arbitral tribunal would seize to have any discretion with regard to the aspects mentioned in the said provision.
Once there is an agreement between the parties which provides that interest shall be at a particular rate, the arbitral tribunal thereafter is left with no discretion. In such circumstances, the arbitral tribunal would be bound by the terms of the agreement.
The maxim “verba chartarum fortius accipiuntur contra proferentem’ has no application at all to the case in hand. This principle would not apply in case of commercial contracts for the simple reason that a clause in a commercial contract is bilateral and has mutually been agreed upon.
The business model of the Respondent was posited on the grant of such unsecured facilities for very short periods of time, thereby enabling the Respondent to repeatedly redeploy the principal plus interest in its business. In the event of default, this cycle would stand disrupted for decades, as in the present case, thereby resulting in loss to the Respondent. Hence the compensatory contractual requirement of compounding, in the case of defaulters cannot be faulted or termed as penal.
The express use of “Unless otherwise agreed by the Parties……” as the opening words of Section 31(7) (a) of the Act, 1996 is a clear instance of “Party Autonomy” which forms the bedrock of the arbitral process and will prevail in all cases, except where the legal provision is strictly non derogable in nature e.g. the bar of limitation.
The principle of unconscionability is inapplicable to voluntary commercial agreements between parties of equal bargaining strength.
Significantly, the contractual clause for interest, in the present case provides for the levy of a concessional rate of interest, as an incentive for punctual repayment. The withdrawal of such concession for failure to abide by the terms thereof and the consequential levy of a higher rate, with compounding, cannot be faulted as being penal.

Cases Reference

2025-12-04

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The judgment was delivered by a Division Bench of Justice J.B. Pardiwala and Justice Sandeep Mehta.

Senior Advocate Gopal Subramanium appeared on behalf of the Appellant, whereas the Respondent was represented by Senior Advocate Shyam Divan.

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Morgan Securities and Credits Pvt. Ltd.

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SC: Rejects Byju’s appeal against NCLAT-judgment directing BCCI to place insolvency withdrawal plea before CoC

swati.durkar@taxsutra.com — Wed, 03 Dec 2025 08:09:15 +0000

SC: Rejects Byju’s appeal against NCLAT-judgment directing BCCI to place insolvency withdrawal plea before CoC swati.durkar@t… Wed, 03/12/2025 - 13:39

Conclusion

SC dismisses appeal filed by Byju Raveendran (Appellant - Edtech firm Byju’s Founder) against the NCLAT judgment directing BCCI to submit its insolvency withdrawal plea u/s 12A of IBC, before the CoC of Byju’s; Apex Court remarks that, “…having gone through the materials on record, we find no good ground to interfere with the impugned orders…”; SC, however, condones the delay of 132 days in re-filing the appeals

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2025-11-28

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The order was passed by a Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan.

Senior Advocate Navin Pahwa along with Advocates Rohan Thawani, V. Shyamohan, Sradhaxna Mudrika, Anshika Bajpai, Anirud C. and Pratul Pratap Singh appeared on behalf of the Petitioner, whereas the Respindents were represented by Senior Advocates Dhruv Mehta, Kapil Sibal aand Shyam Diwan along with AOR Avinash B. Amarnath and Advocates Pooja Mahajan, Arveena Sharma, Ichchha Kalash, Samridhi Shrimali, Sparsh Jain, Prateek Kumar and Raveena Rai.

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SC: Sec. 14 moratorium no shield for defaulting developer; Upholds redevelopment agreement termination by Society

swati.durkar@taxsutra.com — Fri, 28 Nov 2025 13:40:42 +0000

SC: Sec. 14 moratorium no shield for defaulting developer; Upholds redevelopment agreement termination by Society swati.durkar@t… Fri, 28/11/2025 - 19:10

Conclusion

SC, in a landmark judgment, rules that the termination of the Development Agreement by Kher Nagar Sukhsadan Co-operative Housing Society Ltd. (Respondent 1 Society) during the CIRP of AA Estates Pvt. Ltd. (Corporate Debtor - Developer) was valid, lawful, and effective in law, having been carried out after due notice and in consequence of prolonged and inexcusable default by the developer; Slamming the Corporate Debtor for such conduct, SC sternly remarks that, “Such conduct cannot be permitted to take refuge under the moratorium provisions of Section 14 of the IBC. A clear distinction must, therefore, be maintained between corporate debtors who have acted bona fide and those who have merely secured development rights in form but never acted in substance.”; Court notes that - (i) the Appellant entered into a Development Agreement with the Respondent Co-operative society in 2005, but the redevelopment project faced delays due to various reasons, including members’ failure to vacate premises and disputes, (ii) CIRP was initiated against the Appellant in 2019, set aside, and then re-initiated in 2002 and (iii) during the CIRP, the Respondent terminated the Development Agreement, and appointed a new Developer, which let to a Writ Petition being filed by the appellant before the Bombay High Court, and present appeal before SC; Court observes that in the present case, the Corporate Debtor failed to take any meaningful steps towards fulfilling its obligations under the Development Agreement and Supplementary Agreements, and consequently, the slum dwellers and members of the Respondent 1 Society, among the most vulnerable sections of society – continue to be deprived of their right to proper housing and rehabilitation; Court dismayingly expresses that “This case highlights the larger human dimension underlying urban redevelopment…Slum redevelopment projects are not mere commercial ventures but social welfare initiatives aimed at transforming unsafe tenements into dignified homes…When such projects are delayed or abandoned, it is the residents – often living in hazardous or temporary conditions – who suffer the greatest hardship.”; Adding that in this context, the invocation of insolvency proceedings or moratorium under the IBC can’t become a legal device to indefinitely stall redevelopment or to obstruct the legitimate rights of slum indefinitely stall redevelopment or to obstruct the legitimate rights of slum, Bench quips, “The Code was never intended to be used as a shield for non-performance at the cost of human rehabilitation.”; Reiterating that the Sec. 14 moratorium protects only existing, enforceable, and subsisting rights – not inchoate or forfeited rights arising from default or non-performance, Court holds that, “Development rights of a defaulting developer who neither secured possession nor undertook any redevelopment activity cannot be elevated to the status of an “asset” or “property” within the meaning of Section 3(27) of the IBC.”; In conclusion, rejecting the Appellant’s contention that the High Court exceeded its jurisdiction in entertaining the writ petition filed by Respondent No. 1 Society and issuing directions to the planning and municipal authorities to process and grant approvals, SC holds that once the High Court found that the termination of Agreements preceded the CIRP and that no subsisting right of the corporate debtor survived in the project, it correctly concluded that the bar under Section 14 of the IBC was inapplicable

Decision Summary

Parties’ Submissions:

Appellant (Developer) -

Termination of the Development Agreement and Supplementary Agreements by Respondent No. 1 Society was arbitrary, invalid, and contrary to the contractual terms.
Once the agreement conferred an exclusive right upon the developer to undertake redevelopment, such right could not be unilaterally withdrawn.
The Society’s subsequent appointment of a new developer amounts to interference with the corporate debtor’s assets, which are protected under the IBC.

Respondent 1 Society -

1. Termination was validly and lawfully effected after prolonged and repeated defaults on the part of the developer. The record indicates that despite the execution of the Development Agreement and subsequent Supplementary Agreements, the developer did not commence or complete any substantial portion of the redevelopment work, thereby defeating the very object of the project.
2. The stipulated period of forty months from the receipt of the commencement certificate had long expired, and no satisfactory explanation was offered for such an inordinate delay.

3. The Society repeatedly called upon the developer to fulfil its obligations, where the communications specifically cited persistent non-performance, failure to pay transit rent, and failure to commence redevelopment. Notices of default and reminders were issued over several years, culminating in termination notices.

4. Out of 60 members, 41 received no rent while 19 received it only intermittently. Such chronic default justified the Society’s decision to terminate, which was duly communicated and never revoked.

5. In contract law, time is of the essence in a redevelopment agreement, whose object is timely rehabilitation of displaced members. Prolonged delay defeats the foundation of the contract and constitutes a material breach entitling the owner to terminate. The right to terminate for default was expressly reserved in the Development Agreement and the Supplementary Agreements.

6. The termination was thus effected after due notice and prolonged default, and cannot be termed arbitrary or mala fide. The Society, being the owner of the property and guardian of the members’ welfare, cannot be compelled to indefinitely await performance from a defaulting developer. The IBC is not intended to freeze urban welfare projects or protect commercial indolence at the cost of citizens awaiting rehabilitation.

Issues and Observations:

Issue 1. Whether the termination of the Development Agreement and Supplementary Agreements by Respondent No. 1 Society prior to the initiation of the second CIRP was valid and effective in law.

1. Court relied on its rulings in Gujarat Urja Vikas Nigam Ltd., and Tata Consultancy Services Ltd v. SK Wheels Pvt. Ltd. Resolution Professional, Vishal Ghisulal Jain, to hold that the termination in the present case was not occasioned by the insolvency of the corporate debtor but by its persistent non-performance.

2. Letters issued by the Society, record that continuation of the agreement was conditional upon compliance by the developer, failing which the contract would stand cancelled. These defaults occurred well before initiation of the CIRP. Thus, the termination was based on legitimate grounds unrelated to insolvency.

3. Moreover, the redevelopment agreement was not the sole or life-sustaining contract of the corporate debtor. Appellant was engaged in multiple projects; continuation of this particular redevelopment was not significant to the success of the CIRP.

4. The Expression of Interest issued by the Resolution Professional did not even list this project among the corporate debtor’s assets. Hence, termination of the contract neither arose from insolvency nor imperiled the corporate debtor’s survival. It was a lawful termination for non-performance, falling outside the jurisdiction of the NCLT under Section 60(5)(c).

5. Rejecting the Appellant’s plea that the termination became ineffective upon initiation of the first CIRP in 2019 is untenable, SC asserted that this CIRP was set aside in 2020 upon settlement, and no act of revival or affirmation of the terminated contract occurred thereafter. Consequently, the subsequent termination notices stood valid and operative in their own right. Termination was effected before the CIRP and was not a recovery during moratorium.

6. “…the developer was granted only a limited licence to enter and use the land for redevelopment. No estate, proprietary right, or transferable interest was created; ownership and legal possession always remained with the Society. Consequently, the so-called “development rights” of the corporate debtor constitute, at best, a contractual permission and not an “interest in property” within the meaning of Section 14(1)(d) of the IBC.”

7. No subsisting contractual or proprietary right survived in favour of the corporate debtor on the date of initiation of the second CIRP. Consequently, the NCLT lacked jurisdiction under Section 60(5)(c) of the IBC to interfere with such termination.

Issue 2 : Whether the Development Agreement and the Supplementary Agreements constitute “assets” or “property” of the corporate debtor so as to attract the protection of moratorium under Section 14 of the IBC.

8. It is not in dispute that the corporate debtor is entitled to the protection of Section 14 of the IBC. The object of Section 14 is to maintain the corporate debtor’s estate as a going concern and to preserve its assets so as to facilitate resolution. The term “property” u/s 3(27) of the IBC is defined in the widest terms to include money, goods, actionable claims, land and every description of movable or immovable, tangible or intangible property, and extends to deeds and instruments evidencing title or interest therein.

9. However, for the purposes of Sec. 14, only such property or assets which form part of the corporate debtor’s estate as on the insolvency commencement date are protected. Mere expectant, contingent or uncrystallized contractual rights do not constitute “assets” within the meaning of the Code.

10. Not every executory or conditional contract amounts to an asset. The protection of Sec. 14 is confined to existing, subsisting and enforceable rights as on the date of commencement of the CIRP.

11. It is evident that the Agreements stood terminated by Respondent No. 1 Society on account of persistent default and failure of the developer to commence or complete the project. No subsisting challenge to such termination was pending when CIRP commenced. Upon such termination, the corporate debtor was left, at best, with a claim for damages, which is a mere unsecured monetary claim and not a proprietary right capable of protection u/s 14.

12. The Development Agreement expressly stipulates that redevelopment of accommodation for the society members was a contractual obligation of the developer and did not create any proprietary right in its favour. Only upon full and proper performance would the developer earn a “free-sale” entitlement, which alone could be treated as an asset. As the developer failed to perform its obligations, no contingent or beneficial right ever crystallized in its favour.

13. The record further reveals that possession of the property at all times remained with Respondent No. 1 Society. The developer never commenced demolition, construction, or payment of rent and compensation as required under the agreement. In absence of possession or any incident of ownership, Sec. 14(1)(d) has no application.

14. It is well settled that the moratorium under Section 14 does not revive terminated contracts or protect rights that have ceased to exist prior to insolvency. The protection is intended to preserve the existing value of the corporate debtor’s estate, not to resurrect lapsed or extinguished interests. Extending moratorium to such non-existent rights would defeat commercial certainty and the sanctity of lawful termination under general law.

15. Therefore, the Agreements do not constitute “assets” or “property” of the Corporate Debtor within the meaning of Sec. 14 of the IBC, as the same stood terminated prior to initiation of the second CIRP. “No proprietary, possessory, or enforceable right subsisted in favour of the corporate debtor on the insolvency commencement date. The moratorium declared under Section 14 would therefore not restrain Respondent No. 1 Society or its members from proceeding with redevelopment in accordance with law.”

Issue No. 3 : Whether Bombay High Court was justified in allowing the writ petition filed by Respondent No. 1 Society and directing the statutory authorities to process and grant approvals in favour of Respondent No. 8 for redevelopment of the subject project.

16. As to the Appellant’s principal grievance that HC exceeded its jurisdiction in entertaining the writ petition filed by Respondent No. 1 Society and issuing directions to the planning and municipal authorities to process and grant approvals, SC held that once the High Court found that the termination preceded the CIRP and that no subsisting right of the corporate debtor survived in the project, it correctly concluded that the bar under Section 14 of the IBC was inapplicable.

17. The approach adopted by the High Court cannot be faulted. The jurisdiction under Article 226 is wide enough to ensure that statutory authorities perform their public duties and do not withhold approvals without legal justification. The High Court did not usurp the jurisdiction of the NCLT or interfere with any matter directly arising from the insolvency process.

18. This Court has consistently affirmed (in cases like Embassy Property and Ghanashyam Mishra) that the IBC does not oust the constitutional jurisdiction of the High Courts, particularly where intervention is sought against administrative or statutory inaction in the public law domain, provided such intervention does not obstruct or undermine the insolvency process.

19 It is also significant to note that the High Court did not direct the authorities to grant approvals as a matter of right; it merely required them to consider and process the Society’s application on its own merits. Such an order neither prejudices the CIRP proceedings nor affects any stakeholder’s rights under the IBC.

20. Therefore, HC was justified in entertaining the writ petition and issuing directions to the statutory authorities to process and consider the redevelopment proposal of Respondent No. 8 in accordance with law. These directions do not encroach upon the jurisdiction of the NCLT nor offend the moratorium under Section 14 of the IBC.

Issue No. 4 : Whether the proceedings before the High Court stood vitiated by breach of the principles of natural justice, as alleged by the appellants.

21. The touchstone is not whether every procedural formality was observed, but whether the party complaining has suffered actual prejudice or denial of a fair opportunity.

22. In the present case, the writ petition filed by Respondent No. 1 Society was pending before the High Court for a considerable period prior to its final hearing. The record shows that the appellants were duly represented by counsel throughout and were aware of the proceedings. No application for adjournment or extension of time to file a reply was made. The proceedings on 03.09.2024 were conducted in the presence of the counsel for the Resolution Professional, whose submissions were duly recorded in the impugned judgment. In these circumstances, it cannot be said that the High Court acted in undue haste or deprived the appellants of a reasonable opportunity of being heard.

23. The questions before the High Court were essentially legal in nature. Even before this Court, the appellants have failed to point out any specific prejudice or material that they were prevented from placing before the High Court. The principles of natural justice are intended to ensure fairness, not to operate as technical obstacles. They cannot be invoked as “empty ritual” where no real injustice has occurred. The grievance of the appellants is, therefore, more formal than substantive.

24. “In any event, the conduct of the appellants does not inspire equity. The record discloses persistent defaults in payment of transit rent, repeated delays, and failure to commence redevelopment despite multiple extensions. The Society, acting in the collective interest of its members, lawfully terminated the agreement and appointed a new developer who has since made substantial progress. The invocation of Section 14 of the IBC to obstruct rehabilitation of residents was a misconceived attempt to shield inaction under the guise of moratorium protection.”

25. Observing the Appellant’s pattern of defaults in other cases as well, SC reiterated that “…a defaulting developer cannot invoke the moratorium under Section 14 of the IBC to perpetuate inaction or defeat the legitimate rights of residents. The rights of a developer are purely contingent upon due performance, and no subsisting “asset” or “proprietary right” survives once termination has lawfully occurred.”

26. These repeated defaults and prolonged inaction reveal a consistent lack of bona fides on the part of the appellants. The High Court’s intervention in the present case was therefore not only legally sustainable but also necessary to safeguard the rights of the residents and to ensure that the appellants did not misuse the pendency of insolvency proceedings to indefinitely stall redevelopment.

27. Court thus held that the proceedings before HC were conducted in substantial compliance with the principles of natural justice, and rejected the plea of violation of natural justice.

Conclusion:

28. Courts, while dealing with disputes arising from slum redevelopment, must therefore adopt a purposive and welfare-oriented approach, ensuring that the statutory objective of insolvency resolution does not defeat the social purpose of urban renewal. The balance of equities must tilt in favour of the residents who have waited for years for a roof over their heads. The law cannot countenance a situation where insolvency protection becomes an instrument to perpetuate displacement or to defer the promise of dignified housing guaranteed under Articles 19(1)(e) and 21 of the Constitution.

29. The IBC was never designed to serve as a refuge for corporate debtors who, by their conduct, display no bona fide intention to fulfil contractual or statutory obligations. Its purpose is to revive viable entities and ensure equitable resolution of insolvency – not to extend protection to those who have persistently defaulted, abandoned performance, or frustrated projects of public significance. Urban redevelopment projects, particularly those involving cooperative housing societies, are exercises in social rejuvenation that seek to restore dignity, safety, and belonging to citizens.

30. The law must, therefore, balance commercial rights with human realities and ensure that economic revival does not eclipse the constitutional promise of dignified living.

Therefore, SC upheld the HC judgment, directing compliance with the order within 2 months, and added that the Appellants may work out their remedy with respect to the amount alleged to have been expended in the subject project, in the manner known to law.

Cases Reference

2025-11-28

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72722025_2025_11_28.pdf

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The judgment was delivered by a Division Bench of Justice J.B. Pardiwala and Justice R. Mahadevan.

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KHER NAGAR SUKHSADAN CO-OPERATIVE HOUSING SOCIETY LTD & ORS.

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A A ESTATES PRIVATE LIMITED

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SC: Workers' PF dues get priority over secured creditor's claims under SARFAESI

swati.durkar@taxsutra.com — Thu, 27 Nov 2025 07:35:01 +0000

SC: Workers' PF dues get priority over secured creditor's claims under SARFAESI swati.durkar@t… Thu, 27/11/2025 - 13:05

Conclusion

SC partly allows appeals filed by Jalgaon District Central Coop. Bank Ltd. (Appellant, secured creditor) seeking to recover its dues by selling the mortgaged assets of a defunct sugar co-operative society under the SARFAESI Act, rules that, “...workmen’s dues which also have not been quantified as of now cannot have any priority over the claim raised by the secured creditor, the Bank, which is conferred a priority u/s 26E of the SARFAESI Act. However, from the proceeds of the sale of the assets, the first charge would be for the dues under the EPF&MP Act which includes not only the contribution payable but also the interest, penalty and damages if any imposed.”; Notes that HC had directed that the sale proceeds be used first to pay provident fund dues, then workers' unpaid wages (once quantified), and finally the bank's debt, however, the bank challenged this order, contending that its rights as a secured creditor should prevail because its registered security interest gave it priority over all other claims, including workers' dues and provident fund contributions, based on Section 26E of the SARFAESI Act; Analyzing the conflict between the priority given to secured creditors u/s 26E of the SARFAESI Act and the statutory "first charge" created for provident fund dues under the older Sec. 11(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, SC remarks that, “....the effect of the non obstante clause giving precedence over any other law for the time being in force pales into insignificance…There being a clear first charge created under the EPF&MP Act, it overrides the priority u/s 35 and Sec. 13 as also that conferred u/s 26E since a priority cannot be equated with a first charge and cannot be given prevalence over the first charge statutorily created.”; Ruling that if one statute creates a "statutory first charge" on the assets, that charge will prevail over a mere priority conferred by another law, even a later one, Apex Court holds that, “The Appellant-bank would be entitled to proceed with the auction, if not already proceeded with and from the proceeds received in auction, first the dues under the EPF&MP Act will have to be satisfied and then the debts due to the appellant Bank...EPF&MP Act, Sec. 11(2) creates a statutory first charge on the assets of the establishment for any amount due from an employer, be it the employers’ or employees’ contribution, which would include any interest or damages.”; In conclusion, SC grants liberty to the workmen to approach the appropriate authority to determine the dues, and adds that such determination would be necessitated if there is any amount remaining after satisfaction of the provident fund dues and that of the secured creditor

Cases Reference

2025-11-20

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Jalgaon_District_Central_Coop__Bank_Ltd_.pdf

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The judgment was delivered by a Division Bench of CJI B.R. Gavai and Justice K. Vinod Chandran.

Advocate M.Y. Deshmukh appeared on behalf of the Appellant, whereas the Respondents - workmen and their union were represented by Advocate Shivaji M. Jadhav.

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State of Maharashtra and Ors.

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Jalgaon District Central Coop. Bank Ltd.

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SC: Reiterates, Indian Courts lack jurisdiction to appoint arbitrator for foreign-seated arbitration

swati.durkar@taxsutra.com — Thu, 27 Nov 2025 04:35:09 +0000

SC: Reiterates, Indian Courts lack jurisdiction to appoint arbitrator for foreign-seated arbitration swati.durkar@t… Thu, 27/11/2025 - 10:05

Conclusion

SC dismisses petition filed by Balaji Steel Trade (Petitioner) u/s 11(6) r.w. Sec. 11(12)(a) of the Arbitration and Conciliation Act, 1996, seeking appointment of a sole arbitrator in a dispute with Fludor Benin S. A. and others (Respondents), holds that, "Respondent no. 1 being a company incorporated under the laws of Benin, the present dispute squarely falls within the ambit of international commercial arbitration. Once this characterisation is made, Section 2(2) of the Act becomes immediately relevant, for it stipulates that Part I shall apply only where the place of arbitration is in India, thereby mandating that Part I stands excluded where the parties have chosen a foreign seat."; Court reiterates its findings in BALCO, Mankastu, BGS SGS SOMA JV, and PASL Wind Solutions, that Indian Courts have no jurisdiction to appoint an arbitrator for a foreign-seated arbitration, irrespective of the nationality or domicile of the parties; Further, noting that the Article 11 of BSA (Buyer and Seller Agreement between the parties) read with Article 5 of the Addendum unequivocally shows that the parties not only indicated the geographical location of arbitration but also selected the governing law, SC states that the dual indications together leave little scope for doubt that Benin was intended to be the juridical seat with laws of Benin as the curial law; Further, ruling out the applicability of Arbitration Clauses in Sales Contracts and High Seas Sale Contracts (HSSAs), and dismissing the Petitioner's contention that mere mention in BSA that arbitration shall take place in Benin does not by itself make Benin the juridical seat, Court highlights that the BSA constituted the principal or “mother” contract between the parties, defining the their long-term commercial relationship, specifying supply obligations, pricing structure, risk allocation, and a self contained dispute resolution clause providing for arbitration “to take place in Benin” under Benin law; Thus, elucidating that Sec. 2(2) makes the position explicit by providing that Part I applies only where the place of arbitration is in India and consequently, recourse to Sec. 11, located within Part I, is available solely in respect of India-seated arbitrations, and relying on precedents laid down in rulings like Mankastu, BGS SGS SOMA JV and PASL Wind Solutions, Apex Court asserts that Petitioner's endeavour to confer jurisdiction upon this Court by invoking ancillary contracts of a different genus, executed with different parties, and containing materially different arbitration clauses, is wholly misconceived and contrary to the territorial principle that lies at the heart of the 1996 Act

Cases Reference

2025-11-21

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BALAJI_STEEL_TRADE.pdf

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The judgement was delivered by a Division Bench of Justice Pamidighantam Sri Narasimha and Justice Atul S. Chandurkar.

Senior Advocate Devadatt Kamat along with Advocates Shruti Sabharwal and Nishant Doshi and others appeared on behalf of the Petitioner, whereas the Respondents were represented by Senior Advocate Nakul Dewan along with Advocates Susshil Daga, Pallav Mongia and others.

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Pamidighantam Sri Narasimha

Justice A.S. Chandurkar

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Senior Advocate Devadatt Kamat

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Fludor Benin S. A. & Ors.

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LSI-1723-SC-2025-(NDEL)

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SC: Quashes all criminal proceedings against Sterling Group subject to payment of Rs. 5,100 cr. to banks

swati.durkar@taxsutra.com — Wed, 26 Nov 2025 13:09:30 +0000

SC: Quashes all criminal proceedings against Sterling Group subject to payment of Rs. 5,100 cr. to banks swati.durkar@t… Wed, 26/11/2025 - 18:39

Conclusion

SC, subject to deposit of Rs. 5,100 cr. towards full and final settlement with the lender banks and investigating agencies by the defaulting Sterling Group entities (Petitioners) in the bank loan fraud case, directs quashing of all criminal proceedings against the entities; Court specifies that, “The said quashing would be operative on deposit of Rs. 5100 crores as a full and final payment based on consensus, on or before 17.12.2025.”, and directs that upon submitting the claims, the deposited amount shall be disbursed to the respective lender Banks on proportionate basis in reference to the amount due towards them, and as a consequence, the litigation w.r.t. the Petitioners’ loan amount for which the FIR was registered and the One Time Settlement (OTS) was sanctioned and approved, shall be put to an end and this litigation shall be put to quietus; SC states that having considered the submissions and looking at the material placed, it is clear that the amount of defalcation in FIR was Rs. 5383 cr., and the One-Time Settlement w.r.t. all Indian cos. of of the Petitioners with the Banks was for a sum of Rs. 6761 cr., of which the Petitioners have voluntarily deposited fraction of total amount under various heads, and the balance amount comes to around Rs. 3253.37 cr.; Further, Court notes that the Petitioners intended to put a quietus to the litigation with respect to CBI, ED, attachments under PMLA, Fugitive Act, SFIO, pertaining to black money and Income Tax, and had agreed to deposit the amount as demanded, honouring the proposal made by learned Solicitor General on behalf of the Govt., by way of full and final payment of the lender banks and to quash/close all proceedings against them; SC states that since inception, this Court was of the view that if the Petitioners are ready to deposit the amount as settled in OTS and public money comes back to lender banks, the continuation of the criminal proceedings would not serve any useful purpose; Thus, remarking that “The tenor of the proceedings apparently indicate peculiarity, with intent to protect the public money and interest and to get deposited the defalcated amount. In furtherance, the consensus has been arrived…”, Court holds that in the peculiar facts and situation of the present case, discretion as prayed, deserves to be exercised for granting the relief, as prayed and to direct for quashment of all the proceedings

Cases Reference

2025-11-19

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HEMANT_S__HATHI.pdf

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The order was passed by a Division Bench of Justice J.K. Maheshwari and Justice Vijay Bishnoi.

Senior Advocates Mukul Rohatgi and Vikram Chaudhri along with a battery of Advocates appeared on behalf of the Petitioner, whereas the Respondents were represented by SG Tushar Mehta, ASG S.V. Raju and Advocate Zoheb Hossain along with other Advocates.

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Justice J.K.Maheshwari

Justice Vijay Bishnoi

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Senior Advocate Mukul Rohatgi

Advocate Hemant Shah

Advocate Apoorva Agarwal

Advocate Sanjay Aabot

Advocate Devanshi Singh

Advocate Vishal Mann

Central Bureau Of Investigation

ASG Suryaprakash V. Raju

Advocate Mukesh Kumar Maroria

Advocate Rajan Kumar Chourasia

Advocate Kanu Agarwal

Advocate Mr. Zoheb Hussain

Advocate Annam Venkatesh

Advocate Samrat Goswami

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LSI-1721-SC-2025-(NDEL)

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Livein_Aqua_Solutions_Private_Limited.pdf

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SC: Mere ‘defective’ affidavit in Sec. 7 insolvency plea, ‘curable’, doesn’t render petition non-est

swati.durkar@taxsutra.com — Mon, 24 Nov 2025 12:54:22 +0000

SC: Mere ‘defective’ affidavit in Sec. 7 insolvency plea, ‘curable’, doesn’t render petition non-est swati.durkar@t… Mon, 24/11/2025 - 18:24

Conclusion

SC, in a CIRP initiated by HDFC Bank (Respondent) u/s 7 of IBC, against Livein Aqua Solutions Pvt. Ltd. (Appellant - Corporate Debtor) holds that mere filing of a ‘defective’ affidavit in support of an application u/s 7 of IBC, wouldn’t render the very application non est and liable to be rejected on that ground, as it is neither an incurable nor a fundamental defect; Highlighting that significantly, neither Rule 4(1) of CIRP Regulations nor Form 1 require the Sec. 7 application to be supported by an affidavit, but it is Rule 34(4) of the NCLT Rules which prescribes an affidavit to be filed with every petition to be made before the NCLT, SC observes that Sec. 7(5)(b) proviso requires the NCLT to give a notice to the applicant to rectify the defect in his application within 7 days from receiving such notice; SC notes that - (i) despite notice sent by the NCLT Joint Registrar, the Respondent-Bank failed to refile the application after removing defects, which led to the Joint Registrar refusing to register the application, and consequently, the Bank appealed before the NCLT, (ii) NCLT set aside the Registrar’s order and gave the Bank another opportunity to remove the defects, (iii) however, since the defects remained uncured, the Respondent-Bank’s CIRP application came to be ultimately rejected and on appeal by the Bank, NCLAT restored the Sec. 7 petition straightway, remanding the matter to NCLT, without requiring the defective affidavit to be cured, and further, (iv) the Appellant-Corporate Debtor approached SC against this NCLAT order; Referring to Sec. 7(5)(b) proviso and Rule 38 of the NCLT Rules, Court observes that issuance of a notice by the Registrar to an authorised representative of the Respondent-Bank was not enough to satisfy the mandate of the proviso to Section 7(5)(b) of the IBC, and holds that the notice necessarily had to be given to under the said provision and compliance with the Rules, independently framed for the National Company Law Tribunal, was not sufficient; Thus, SC opines that even though the NCLT Registry issued process under Rules 28 of the NCLT Rules, the same was insufficient as there was no communication of a notice u/s 7(5)(b) proviso at any time, and thus states that there was no error by NCLAT in holding to this effect; However, Court asserts that the NCLAT ought to have asked the Respondent-Bank to cure the defective affidavit at least at that stage instead of ignoring the same and directing the NCLT to proceed to hear the company petition on merits and in accordance with law; In conclusion, remarking that, “To that extent, the NCLAT was in error.”, SC directs the Respondent-Bank to cure the defects including the defective affidavit, and the NCLT to take up the matter for hearing

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2025-11-24

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The judgement was delivered by a Division bench of Justice Sanjay Kumar and Justice Alok Aradhe.

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Justice Sanjay Kumar

Justice Alok Aradhe

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HDFC Bank Ltd.

LSI Citation

LSI-1701-SC-2025-(NDEL)

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Livein Aqua Solutions Private Limited

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SC: SC to hear dispute concerning ‘salary’ payable u/s 53(1)(c) of IBC, on December 2

swati.durkar@taxsutra.com — Mon, 24 Nov 2025 09:29:45 +0000

SC: SC to hear dispute concerning ‘salary’ payable u/s 53(1)(c) of IBC, on December 2 swati.durkar@t… Mon, 24/11/2025 - 14:59

Conclusion

SC lists matter for final disposal on the issue of ‘salary’ payable u/s 53(1)(c) of the IBC, on December 2, 2025, remarks that, “We need to hear this matter, more particularly, on the issue of Salary…”; Notes that – (i) Appellant {association comprising of about 212 employees of LANCO (Corporate Debtor)} had sought before the NCLT, a direction to the Liquidator to pay the Applicant’s salary for the month of June, 2017, (ii) Appellant had also sought direction to Liquidator to pay the retention allowance which was committed by the erstwhile Management of the Corporate Debtor being an incentive for the employees to continue with the employment of the Corporate Debtor, (iii) NCLT rejected Appellant’s claim; SC observes that the total claim of Rs. 5.63 cr. has been bifurcated in two parts i.e. salary of the employees for the month of June, 2017 and amount towards “retention allowance” which was part of the salary for the month of March, 2018; Further, underscoring that, “Insofar as salary is concerned, the same has been sanctioned. However, the claim towards retention allowance has been rejected.”, SC mentions that, “The only dispute today as it appears from the stance of the Liquidator is that the salary for the month of June, 2017 relates to the period prior to the admission of the corporate debtor into…CIRP.”; Thus, considering Liquidator’s submission that salary would be paid in accordance with Sec. 53(1) (c), as well as the Appellant argument that payment of salary applying the waterfall mechanism in accordance with Sec. 53(1) (c) would cause serious prejudice, SC posts the matter for December 2

Cases Reference

2025-11-17

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LANCO_INFRATECH_EMPLOYEES_WELFARE_ASSOCIATION.pdf

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The order was passed by a Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan.

Advocates Ashish Kumar Pandey, Shivraj Singh Tomar, Arun and Yasheeka Garg along with AOR Mayank Pandey appeared on behalf of the Appellant, whereas the Respondent was represented by Advocate Basa Mithun Shashank and AOR Manish Tiwari.

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Justice K.V. Viswanathan

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Advocate Arun

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Anuradha Bisani.

Advocate Basa Mithun Shashank

Advocate Manish Tiwari

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LSI-1699-SC-2025-(NDEL)

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Lanco Infratech Employees Welfare Association

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SC: SC to hear challenge to Reg. 21A of Information Utilities Regulations

swati.durkar@taxsutra.com — Mon, 24 Nov 2025 09:25:13 +0000

SC: SC to hear challenge to Reg. 21A of Information Utilities Regulations swati.durkar@t… Mon, 24/11/2025 - 14:55

Conclusion

SC to hear writ petition seeking declaration of Reg. 21A of the Information Utilities Regulations as unconstitutional, ultra vires, and void, to the extent it makes the latest acknowledgment of debt mandatory; Petition also seeks direction to the IBBI to provide a suitable alternative mechanism or relaxation in cases where acknowledgment of debt is unavailable, including acceptance of other admissible evidence of default; SC remarks that, “We request the learned Solicitor General of India, Mr. Tushar Mehta to look into this matter and assist us on the next date of hearing.”

Cases Reference

2025-11-17

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PRANAV_THAKKAR_VS__UNION_OF_INDIA.pdf

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The order was passed by a Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan.

Advocates Shirish K Deshpande, Rucha Pravin Mandlik, Mohit Gautam, Raghav Arora and Viraj Parakh appeared on behalf of the Petitioner, whereas the Respondents were represented by Advocate M.K. Maroria.

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LSI Judge Name

Justice J. B. Pardiwala

Justice K.V. Viswanathan

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Advocate Shirish K Deshpande

Advocate Rucha Pravin Mandlik

Advocate Mohit Gautam

Advocate Raghav Arora

Advocate Viraj Parakh

UoI

Advocate M.K. Marori

LSI Citation

LSI-1698-SC-2025-(NDEL)

LSI Judiciary Level

LSI City/Bench