NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) has dismissed appeals by the Noida and Greater Noida industrial development authorities seeking secured creditor status in the insolvency case of realty firm Shubhkamna Buildtech.
A two-member bench of the appellate tribunal held that a 2026 amendment to the Insolvency and Bankruptcy Code (IBC) bars such claims based on statutory charges, and upheld the earlier classification of New Okhla Industrial Development Authority (NOIDA) and Greater Noida Industrial Development Authority (GNIDA) as unsecured operational creditors.
Both authorities had challenged a 2022 order of the National Company Law Tribunal (NCLT) approving the Resolution Plan for Shubhkamna Buildtech.
NOIDA claimed dues of Rs 99.32 crore, against which the Plan provided Rs 25 crore, while GNIDA claimed Rs 60.64 crore, against which the Plan provided Rs 18.5 crore.
The authorities had relied on the Supreme Court’s rulings in State Tax Officer vs Rainbow Papers Ltd and Greater Noida Industrial Development Authority vs Prabhjit Singh Soni, which had recognised statutory charges as conferring secured creditor status in certain insolvency cases.
However, the NCLAT noted that the Insolvency and Bankruptcy Code (Amendment) Act, 2026, effective from May 26, 2026, has inserted an explanation to Section 3(31) of the Code clarifying that a “security interest” must arise from an agreement between parties, and excludes charges created merely by operation of law.
A statutory charge is a claim on a debtor’s property that arises automatically by operation of a law or statute, not because two parties signed an agreement creating it.
Under Clause 8.6, Paragraph 15 of the Plan, homebuyers were to bear any amount directed to be paid over and above the Plan provision on a pro-rata basis. The combined gap between the authorities’ claims and the Plan provision was about Rs 116 crore — the potential exposure homebuyers faced had the appeals succeeded, according to advocate Aditya Parolia of PSP Legal, who represented the homebuyers.
“As a result, the homebuyers of two projects — Shubhkamna City and Shubhkamna Techomes — will face no escalation and no additional contribution under the approved Resolution Plan,” Parolia said.
The bench of Justice Mohammad Faiz Alam Khan and Naresh Salecha said the statutory-charge route relied upon by the authorities, resting on charges created “by operation of” Sections 13, 13-A and 14 of the UP Industrial Area Development Act, is no longer available to claim “security interest” status under the Code.
“We are of considered view that… GNIDA’s and NOIDA’s claim, to secured creditors, rests on the statutory recovery mechanism recorded in Clause 11 of the two Lease Deeds… which does not provide any protection to the Appellants against this changed legal position,” the NCLAT said.
It held the 2026 amendment is clarificatory in nature and would apply retrospectively, following the Madras High Court’s reasoning in a related case.
Examining the lease deeds executed by GNIDA in 2011 and NOIDA in 2010 with the corporate debtor, the NCLAT found they did not contain a general, unconditional charge clause, unlike a separate case involving Arena Superstructures where NOIDA’s sub-lease deed had an express first-charge clause covering all dues.
The tribunal also noted that homebuyers, classified as financial creditors, had themselves taken a steeper 75.70 per cent haircut under the plan, which was cited as evidence that the allocation to the two authorities was not discriminatory.
The Resolution Plan was earlier approved by the Committee of Creditors with over 87 per cent voting share. In a poll directed by the NCLAT, 95.6 per cent of homebuyers who participated had voted against granting secured creditor status to the two authorities.
“The Appeals fail and stand rejected,” the NCLAT said in its 43-page order.
