The Supreme Court has held that homebuyers can jointly initiate insolvency proceedings against two or more closely linked real estate developers through a single petition, provided the facts demonstrate functional and financial interlinkage between the companies.
The Court upheld the initiation of corporate insolvency resolution process (CIRP) against Grand Venezia Commercial Towers Pvt. Ltd. and Bhasin Infotech and Infrastructure Pvt. Ltd., dismissing appeals filed by their former directors.
Background of the Case
The case arose from a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC) filed by over 140 allottees of commercial office units in the “Grand Venezia Commercial Tower,” part of a composite real estate project launched in 2005. The project comprised a mall, multiplex, hotel, and commercial office spaces and was developed on leasehold land allotted by the Uttar Pradesh State Industrial Development Authority (UPSIDA).
The allottees alleged that despite paying substantial amounts, the developers failed to complete construction and hand over lawful possession of the units even years after the promised delivery date of May 2013. They contended that no final completion certificate or occupancy certificate had been issued and that mandatory tripartite sub-lease deeds involving UPSIDA were never executed, making legal possession impossible.
Orders of NCLT and NCLAT
The National Company Law Tribunal (NCLT), New Delhi, admitted the insolvency petition in December 2023, holding that the allottees qualified as financial creditors. A clear default existed due to non-delivery of possession. The statutory threshold of 100 allottees under Section 7 of the IBC was satisfied.
The NCLT also ruled that insolvency proceedings could be initiated jointly against both companies, noting their deep involvement in the same project.
This decision was upheld by the National Company Law Appellate Tribunal (NCLAT), which found that both entities were intrinsically connected through common directors, joint venture arrangements, shared correspondence, and interlinked payment and allotment documents.
Issues Before the Supreme Court
The appellants argued that a single insolvency petition against two separate corporate entities was not maintainable. The 100-allottee threshold was not met due to alleged settlements and withdrawals. Construction of the project was complete and possession had already been offered. Changes in the list of allottees after filing the petition rendered it invalid
Supreme Court’s Ruling
Rejecting all contentions, the Supreme Court delivered a detailed analysis and held the 100-allottee threshold must be examined as on the date of filing of the insolvency application, not at the time of admission or hearing. Subsequent settlements or withdrawals do not affect maintainability.
The Court affirmed that the IBC does not bar joint insolvency proceedings against multiple corporate entities where they are closely linked in ownership, control, and project execution. In real estate projects, such joint proceedings are often necessary for value maximisation and effective resolution.
Relying on inspection reports, interim resolution professional findings, and statutory authority records, the Court concluded that large portions of the commercial tower were incomplete and lacked basic amenities.
The Court ruled that so-called possession letters or notional possession are meaningless in law where no completion certificate, occupancy certificate, or tripartite sub-lease deeds exist, particularly on leasehold land.
Amendments made while curing defects in the petition were held to be permissible under NCLT procedural rules and did not amount to abuse of process.
Settlement Offer Rejected
The Supreme Court also dismissed a separate appeal challenging the rejection of an offer to deposit Rs. 15.62 crore to settle claims of certain allottees. The Court held that once the insolvency process was validly triggered, such belated offers could not undo statutory proceedings.
Case Details
Case Title: Satinder Singh Bhasin Versus Col. Gautam Mullick & Ors
Case No.: Civil Appeal No. 13628 of 2025
Date: 02/02/2026
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