A A ESTATES PRIVATE LIMITED v. KHER NAGAR SUKHSADAN CO OPERATIVE HOUSING SOCIETY LTD
Discusses the interplay between IBC provisions, constitutional rights, and principles of natural justice in redevelopment projects.
Court: Supreme Court of India
Citation: 2025 INSC 1366
Decision Date: 28-11-2025
List of Laws
Insolvency and Bankruptcy Code, 2016; Constitution of India, 1949; The Indian Easements Act, 1882; Maharashtra Municipal Corporations Act, 1949; General Principles of Law
- Insolvency and Bankruptcy Code, 2016: The judgment extensively discusses Section 14 of the IBC, focusing on the scope and applicability of the moratorium. It clarifies that the moratorium under Section 14 protects only existing, enforceable, and subsisting rights, not inchoate or forfeited rights arising from default or non-performance. The judgment refers to Section 3(27) of the IBC, defining "property" in the widest terms, but clarifies that for Section 14 purposes, only property forming part of the corporate debtor's estate on the insolvency commencement date is protected. The judgment also discusses Section 60(5)(c) of the IBC, examining the NCLT's jurisdiction to restrain termination of contracts, limiting it to cases where termination is solely due to insolvency or would cause the corporate death of the debtor. Sections 18(f) and 25(2)(a) of the IBC are mentioned in reference to the Victory Iron Works Ltd v. Jitendra Lohia case, regarding development rights as "assets". Section 14(1)(b) of the IBC is mentioned as being violated by the impugned judgment.
- Constitution of India, 1949: The judgment discusses Article 226 of the Constitution, emphasizing that the constitutional jurisdiction of the High Courts under Article 226 cannot be curtailed by statute, even during the moratorium under Section 14 of the IBC. It also refers to Article 21 of the Constitution, highlighting the fundamental right to life and shelter, particularly for low-income members of the society. Article 136 is mentioned in the context of suppressing orders, thereby disentitling the appellants to any relief under it. The judgment also mentions Articles 19(1)(e) and 21 in the context of dignified housing.
- The Indian Easements Act, 1882: The judgment refers to Section 52 of the Indian Easements Act, 1882, defining a "licence" as a right to do something upon immovable property of another without creating an easement or interest therein. The judgment uses this definition to distinguish between a license and an interest in property, concluding that the developer was granted only a limited license.
- Maharashtra Municipal Corporations Act, 1949: The judgment mentions Section 264 of the Maharashtra Municipal Corporations Act, 1949, under which the building was declared a C-1 category (dangerous structure). Sections 353B, 354, and 354A of the MMC Act are also mentioned, indicating notices issued by the Municipal Corporation of Greater Mumbai (MCGM) regarding the dilapidated structure.
- General Principles of Law: The judgment discusses the principles of natural justice, particularly the 'audi alteram partem' rule (the right to be heard) and 'nemo judex in causa sua' (no one shall be a judge in their own cause). It emphasizes that the application of these principles depends on the context and nature of the proceedings and that the touchstone is whether the party complaining has suffered actual prejudice or denial of a fair opportunity. The judgment also touches upon the concept of bona fides and its relevance in insolvency proceedings.
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