Can Have Joint Insolvency Process When Corporate Debtors Intrinsically Linked: Supreme Court Upholds CIRP Initiation Agaisnt Grand Venezia

The Apex Court was considering an appeal filed by the erstwhile Director of Grand Venezia Project in a case where the National Company Law Tribunal had initiated a corporate insolvency resolution process against M/s. Grand Venezia Commercial Towers Private Limited and M/s. Bhasin Infotech and Infrastructure Private Limited.

The Division Bench of Justice Sanjay Kumar and Justice K. Vinod Chandran held, “Before us, the appellants have stated that Grand Venezia Ltd. purchased 1,114 units in the project from Bhasin Ltd. on 31.03.2016 for ₹218 crores. 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. The NCLT and the NCLAT were, therefore, justified in concluding that the corporate debtors were 20 intrinsically linked and that it would be in their interest to have a joint insolvency process so as to maximise asset realisation.”

“On the above analysis, we hold that the company petition instituted under Section 7 of the Code against both the corporate debtors by the allottees of 103 units was maintainable on all counts. The petitioning allottees duly established their financial debt and also the default in connection therewith, inasmuch as the units for which they had paid valuable consideration were not made ready and delivered to them till date. We, accordingly, find no error having been committed either by the NCLT in admitting the company petition or by the NCLAT in confirming the same in appeal”,it added.

AOR Malak Manish Bhatt represented the Appellant while Senior Advocate Atmaram N. S. Nadkarni represented the Respondent.

Factual Background

The National Company Law Tribunal initiated a corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Grand Venezia Commercial Towers Private Limited and M/s. Bhasin Infotech and Infrastructure Private Limited. Assailing the said order, the Company Appeal came to be filed before the National Company Law Appellate Tribunal, Principal Bench, New Delhi. Ashok Kumar is an erstwhile Director of Grand Venezia Ltd., while Satinder Singh Bhasin is an erstwhile Director of Bhasin Ltd. Both of them were the appellant in the company appeals.The NCLAT took note of the appellants’ claim that the constructions were complete and the units were ready to occupy and directed that no further steps should be taken pursuant to the order admitting the company petition.

The appellants were also directed not to create third-party interests in respect of the respondents’ units. However, by common judgment, the NCLAT dismissed both the appeals. During the pendency of the proceedings before the NCLAT, Satinder Singh Bhasin filed an application in his appeal seeking permission to deposit ₹15,62,00,000 to prove his bona fides. This application was filed after judgment was reserved in the appeals. Aggrieved by the dismissal of the same, Satinder Singh Bhasin approached the Apex Court.The company petition from which the NCLT’s order emanated was filed by 141 individuals against Grand Venezia Ltd. and Bhasin Ltd., the corporate debtors, seeking initiation of the corporate insolvency resolution process against them under Section 7 of the Code. They claimed to be financial creditors, being allottees in the commercial complex, named ‘Grand Venezia Commercial Tower’, which formed part of a composite and integrated real estate project launched by Bhasin Ltd. in the year 2005.

The complaint of the petitioners before the NCLT was that the units allotted to them were not made ready and were unfit for occupation. The NCLT concluded that the corporate debtors had failed to hand over possession of the units to the allottees and, in consequence, the default in respect of the financial debt stood proved. The NCLAT accepted the finding of the NCLT that the allottees of 103 units, who had filed the company petition, met the threshold requirement of a minimum of 100 allottees. Concluding that the construction was not complete, the NCLAT dismissed the appeals filed by the erstwhile Directors of both the corporate debtors.

Reasoning

The Bench explained that Rule 28(4) manifests that it is only after the refiling, upon curing of the defects, that the Registrar would register the pleading or document. Rule 29 of the NCLT Rules is titled ‘Registration of proceedings admitted’ and states that on admission of an appeal, petition, caveat or application, the same shall be numbered and registered in the appropriate register maintained for that purpose and the number shall be entered therein.

The company petition was filed on July 7, 2021 by 145 individuals but as some of them were joint allottees of a single unit, they had to be counted as one and not as two applicants.“Ergo, the mere filing of the company petition on 07.07.2021 did not result in the same being ‘registered’ on the file of the NCLT and it was only after rectification/amendment of the petition and upon its refiling, with the defects therein cured, that the same would have been registered”, it added.

The Bench was of the view that the NCLT and the NCLAT were justified in concluding that the corporate debtors were intrinsically linked and that it would be in their interest to have a joint insolvency process.“Before us, the appellants have stated that Grand Venezia Ltd. purchased 1,114 units in the project from Bhasin Ltd. on 31.03.2016 for ₹218 crores. 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 stated.

Dealing with the claim of the appellants that the construction was complete and the units were ready for occupation before the date of filing of the company petition, the Bench noted the admitted fact that an Occupancy Certificate in the prescribed format had not been issued by the UPSIDA till date for the project. “Further, notional possession letters were also issued to allottees, which are of no significance whatsoever. These so-called letters of actual delivery of physical possession, in our considered opinion, have no legal import given the categorical stipulation by the UPSIDA in its allotment letter and also the lease deeds that physical possession should not be delivered to allottees without execution of the tripartite sublease deeds”, it added.

On a perusal of the facts of the case, the Bench came to the conclusion that neither was the construction completed nor could the possession of the units be delivered to the allottees without fulfilling all necessary formalities in that regard after completion of the building in all respects. The Bench found no error having been committed either by the NCLT in admitting the company petition or by the NCLAT in confirming the same in appeal.

The Bench also noted that the offer made by Satinder Singh Bhasin, the appellant therein, to deposit a sum of ₹15.62 crores was based on the premise that the said amount would suffice to settle the claims of the 55 alleged allottees who, according to him, still remained in the fray after settlement of the claims of the other petitioning allottees in the company petition. The Bench, however, found this premise itself to be without basis. Dismissing the appeals, the Bench held, “Therefore, the order passed by the NCLAT rejecting the offer made by Satinder Singh Bhasin, vide the order dated 07.10.2025, does not warrant interference either on facts or in law. This appeal is equally devoid of merit.”

Cause Title: Satinder Singh Bhasin v. Col. Gautam Mullick & Ors. (Neutral Citation: 2026 INSC 104)

Appearance

Appellant: AOR Malak Manish Bhatt

Respondent: Senior Advocates Atmaram N. S. Nadkarni, Dhruv Mehta, Meenakshi Arora, Vipin Sanghi, Advocate Ruchira Gupta, AOR Salvador Santosh Rebello, Advocates Pooja Tripathi, Areen Gulati, Mohtisham Ali, Raghav Sharma, Moulishree Pathak, Jaskirat Pal Singh, Manisha Gupta, Arzu Paul, Himanshi Nagpal, Ujjawal Agrawal, Gyanendra Yadav, Utsav Tarsolia, Saket Sikri, Nikhil Kohli, Nalin Talwar, Ishan Gaur, Mani Mehta, Manish Singhal, Akshaya Ganpath, Kushank Garg, Saumya Tiwari, Ajay Pal Singh Kuller, AOR Ritika Gambhir Kohli, Payal Chawla, Tishampati Sen, AOR Shubhanshu Gupta, Advocates Kartik Pant, Chaitanya, Raunak Satpathy, Keith Varghese, Srijan Sonkar, Abhishek Anand, AOR Mandeep Kalra, Advocates Karan Kohli, Palak Kalra, Ridhima Mehrotra, Radhika Narula, Anushna Satapathy, Chitrangada Singh, Radhika Jalan, Widaphi Lyngdoh, Yashas J, Gauri Rajput, Vaibhav Yadav, Paras Mohan Sharma, Shefali Tripathi

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