IBC | Single Insolvency Plea Maintainable Against Intricately Linked Corporate Entities In Real Estate Projects: Supreme Court
Kiran Raj
The Supreme Court of India Division Bench of Justice Sanjay Kumar and Justice K. Vinod Chandran has held that, in real estate projects, a single insolvency application by allottees can proceed against more than one corporate entity when the entities are intrinsically connected in the project’s execution and marketing, affirming a joint corporate insolvency resolution process against two such companies. The dispute arose from complaints by homebuyer-allottees of commercial units that the promised premises were not handed over in a legally deliverable condition, with the required completion/occupancy clearances and tripartite sublease documentation remaining pending, and assured returns having stopped. The Court dismissed the management’s challenges and sustained the admission of the insolvency proceedings.
Office-space allottees who booked office spaces in the “Grand Venezia Commercial Tower”, part of an integrated project launched in 2005 on UPSIDA leasehold land, filed a Section 7 insolvency application against two corporate entities; possession was stated to be due by May 2013. They alleged the units were unfit for occupation, that no completion certificate covered their portion, and cited an RTI reply dated 24 March 2018 stating no application for a final completion certificate. Relying on UPSIDA requirements and allotment letters, they said that without completion clearance, tripartite sublease deeds could not be executed or registered and possession could not lawfully be delivered. They also stated assured returns stopped from January 2014.
One entity did not file a reply. The other said it was a broker/marketer, alleged unpaid principal dues and stamp duty, and relied on a UPSIDA completion certificate dated 16 April 2015 and a clarification dated 3 March 2017 to assert compliance. The application was filed on 7 July 2021 by 145 individuals and, after curing defects, proceeded with 141 petitioners, recorded as allottees of 103 units.
On the structure of the project and the relationship between the two corporate entities, the Court observed: “The project was, therefore, to be undertaken essentially by Bhasin Ltd. It was only thereafter, i.e., on 14.12.2009, that Bhasin Ltd. entered into an agreement with Grand Venezia Ltd., granting it marketing rights in relation to the sale of units in the project.” The Court further recorded: “It is a matter of record that the two companies had common directors, including Satinder Singh Bhasin, for some length of time.”
Addressing the manner in which the companies dealt with allottees, the Court noted: “Further, demand notices and possession letters were issued by Bhasin Ltd. to the allottees of Grand Venezia Ltd. and the correspondence/communications with the allottees were by both the companies interchangeably.” It added: “Payment receipts also manifested the same.” The Court stated that “These documents formed part of the company petition.”
On the maintainability of a joint insolvency application, the Court recorded its agreement with the approach taken by the appellate tribunal: “There is, thus, no possibility at this stage for either company to say that they are not jointly liable to the allottees of the project.” It further stated: “The NCLT and the NCLAT were, therefore, justified in concluding that the corporate debtors were intrinsically linked and that it would be in their interest to have a joint insolvency process so as to maximise asset realisation.”
While examining the legal basis for a joint corporate insolvency resolution process, the Court referred to earlier decisions where such an approach was adopted. It noted that the NCLAT had applied the group of companies principle in Edelweiss Asset Reconstruction Company Limited vs. Sachet Infrastructure Private Limited and in Mamatha vs. Amb Infrabuild P. Ltd. and others, in circumstances where the business operations of related entities were intertwined.
The Court reproduced the observation from the NCLAT in Mamatha vs. Amb Infrabuild P. Ltd. and others, stating: “if two corporate debtors collaborate and form an independent corporate entity for developing land and allotting premises to allottees, the application under Section 7 of the Code would be maintainable against both of them jointly and not individually against one or the other.”
On the ultimate issue of maintainability, the Court held: “the application under Section 7 of the Code would be maintainable against both of them jointly and not individually against one or the other.”
The Court directed: “All the three appeals are, accordingly, dismissed. Pending applications shall also stand dismissed.”
Case Title: Satinder Singh Bhasin versus Col. Gautam Mullick & Ors
Neutral Citation: 2026 INSC 104
Case Number: Civil Appeal No. 13628 of 2025; Civil Appeal No. 13779 of 2025; Civil Appeal No. 13812 of 2025
Bench: Justice Sanjay Kumar, Justice K. Vinod Chandran
