The Supreme Court has held that assets belonging to subsidiary companies cannot be treated as assets of the corporate debtor during the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC).
The judgment arose from a batch of appeals led by Alpha Corp Development Private Limited vs Greater Noida Industrial Development Authority (GNIDA), challenging the decision of the National Company Law Appellate Tribunal (NCLAT), which had set aside approval of resolution plans involving multiple stalled real estate projects.
The case traces back to insolvency proceedings initiated against Earth Infrastructures Limited (EIL), a real estate developer involved in multiple housing and commercial projects in Greater Noida and Gurugram. The projects—Earth Towne, Earth TechOne, and Earth Sapphire Court—were built on lands leased by Greater Noida Industrial Development Authority to subsidiary entities of EIL.
During the CIRP, resolution plans submitted by entities including Alpha Corp and Roma Unicon Designex Consortium were approved by the Committee of Creditors (CoC) and later by the National Company Law Tribunal (NCLT). However, GNIDA challenged these approvals, arguing that the resolution plans unlawfully dealt with leasehold land without its consent.
At the heart of the dispute was whether leasehold land allotted to subsidiary companies could be treated as part of the corporate debtor’s assets and consequently be included in resolution plans without the lessor authority’s approval.
The Court reaffirmed that subsidiary companies are separate legal entities. Therefore, assets held by such subsidiaries—including leasehold rights—cannot be automatically included in the CIRP of the holding company.
The Court emphasized that lease agreements executed by GNIDA contained specific conditions governing transfer. Any transfer or modification of leasehold rights required prior approval of GNIDA, which could not be bypassed through a resolution plan.
The Court held that resolution plans under the IBC cannot override binding contractual terms or statutory provisions governing land allotment. GNIDA, as the lessor, retained control over the land and was not bound by resolution plans that attempted to alter its rights without consent.
The Court noted procedural lapses, observing that GNIDA ought to have been made a party and given an opportunity to be heard before approval of resolution plans involving its leased lands.
While upholding its legal rights, the Court was critical of GNIDA’s conduct; it found that GNIDA failed to actively monitor project development despite contractual obligations. The authority delayed filing claims during CIRP proceedings and acted inconsistently. GNIDA’s inaction contributed to prolonged delays affecting homebuyers.
The Court observed that GNIDA could not later portray itself as an “uninformed victim” after remaining inactive during crucial stages of insolvency proceedings.
Recognizing the plight of thousands of homebuyers whose investments were stuck in stalled projects since 2016, the Court endorsed a practical resolution framework: fresh resolution plans may be invited. GNIDA must recalculate dues, excluding penal interest in certain circumstances. Transfer of leasehold rights can proceed only after GNIDA’s approval and settlement of dues. Homebuyers’ associations and resolution applicants may collaborate to complete projects.
The Court clarified that the Earth Copia project in Gurugram—built on freehold land unrelated to GNIDA—should not have been impacted by disputes concerning GNIDA-leased land. This aspect was overlooked by the NCLAT and required correction.
Case Details
Case Title: Alpha Corp Development Private Limited Versus Greater Noida Industrial Development Authority (GNIDA) and others
Citation: JURISHOUR-1107-SC-2026
Case No.: CIVIL APPEAL NO. 1526 OF 2023
Date: 05/05/2026
