NCLAT: Mortgagee Bank Can’t Demand Exclusion of Property From Resolution Plan Approved by Unit Holders With Valid Conveyance Deeds
Pranav B Prem
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka and Mr. Barun Mitra (Technical Members), dismissed an appeal filed by HDFC Bank seeking exclusion of mortgaged property from a resolution plan. The Tribunal held that a mortgagee bank cannot claim exclusion of a unit from an approved resolution plan when the unit holders—who hold either conveyance deeds or builder-buyer agreements—have already approved the plan. It further emphasized that the Bank, having no ownership or transactional privity with the Corporate Debtor over the said units, lacked the locus to object.
The appeal was filed against an order dated 07.03.2025 passed by the Adjudicating Authority (NCLT), which had rejected I.A. No. 3778 of 2022 filed by HDFC Bank. The Appellant claimed mortgage rights over units on the sixth floor of Universal Business Park, having a super built-up area of 8702 sq. ft., for which a conveyance deed had been executed in favour of M/s Nayanika Holdings Pvt. Ltd. on 14.10.2015. On this basis, HDFC Bank requested that the said units be excluded from the resolution plan.
In response, the Respondents submitted that the resolution plan had already been approved by the Adjudicating Authority in 2021 and was subsequently remitted to the Committee of Creditors (CoC) for the limited purpose of reconsidering certain financial creditor claims, including that of Kotak Mahindra Bank. Following this reconsideration, the CoC again approved the plan. Therefore, it was argued that HDFC Bank had no locus to raise objections at this stage.
The Tribunal, after hearing the parties, observed that the mortgage in question arose from a loan agreement executed between HDFC Bank and M/s Nayanika Holdings Pvt. Ltd., and that there was no tripartite agreement involving the Corporate Debtor. It noted that the conveyance deed reflected a direct transaction between the Corporate Debtor and M/s Nayanika Holdings. Since the Bank had not acquired any independent right over the property from the Corporate Debtor, it could not seek intervention in a resolution plan involving the Corporate Debtor’s assets.
The NCLAT referred to paragraph 26 of the Adjudicating Authority’s order, which clearly recorded that the mortgage was based solely on a bilateral agreement between the Bank and Nayanika Holdings. The Tribunal held that any dispute arising from this agreement was personal to the Bank and Nayanika Holdings and should be adjudicated in an appropriate forum, not within the resolution proceedings. It observed: “The Applicant Bank has no locus to object to a resolution plan which already stands approved by the CoC… It is not open for this Tribunal to determine the disputed issue between the Applicant and Nayanika Holdings.”
The Appellate Tribunal agreed with the Adjudicating Authority’s reliance on its earlier order dated 11.06.2021, which explicitly limited objections to resolution plans to those concerning the claims of financial creditors. Since the units in question were considered as part of the resolution plan and were approved by genuine unit holders with conveyance deeds or builder-buyer agreements, the Bank could not seek exclusion of those assets based merely on mortgage rights.
The NCLAT clarified that the appropriate remedy for HDFC Bank, if any, lies against M/s Nayanika Holdings Pvt. Ltd., with whom the loan agreement had been executed. The Tribunal reiterated that the Bank’s mortgage interest did not give it standing to interfere with a resolution plan approved under the IBC framework.
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While the Appellant also relied on the NCLAT’s earlier judgment in Deepak Sakharam Kulkarni v. Manoj Kumar Agarwal [2024 SCC OnLine 2562,the Tribunal distinguished the facts. It stated that the earlier case involved rights claimed by a party over units which were never the Corporate Debtor’s assets. In contrast, in the present matter, the Corporate Debtor had conveyed the units to a third party, and HDFC Bank’s mortgage rights stemmed from that transaction.
Concluding that there was no error in the Adjudicating Authority’s order, the NCLAT dismissed the appeal. However, it clarified that the dismissal would not preclude the Bank from pursuing other remedies in accordance with law against M/s Nayanika Holdings Pvt. Ltd.
Appearance
For Appellant: Mr. Gaurav Mitra, Mr. Dhruv Gupta, Ms. Arushi and Ms. Jasveen Kaur, Advocates
For Respondent: Mr. Swapnil Gupta, Mr. Vaibhav Mendiratta, Mr. Sajal Jain, Mr. Harshit Gupta and Mr. Tarun Mishra, Advocates for RP/R-1. Mr. Himanshu Kapoor and Mr. Harshal, Advocates for R 2/SRA. Mr. Rahul Malhotra, Advocate for R-3.
Cause Title: HDFC Bank Ltd V. Atul Kumar Kansal & Ors.
Case No: Company Appeal (AT) (Insolvency) No. 549 of 2025
Coram: Justice Ashok Bhushan [Chairperson] , Mr. Arun Baroka [Member (Technical)], Mr. Barun Mitra [Member (Technical)]
[Read/Download order]
