Restoration of Cancelled Lease Vital for Corporate Debtor’s Resolution; NCLT Exclusive Jurisdiction Affirmed under IBC
- REEDLAW
- Nov 14, 2025
- 4 min read
REEDLAW Legal News Network reports: In a pivotal ruling, the Allahabad High Court affirmed that disputes concerning the restoration of a cancelled lease crucial to a Corporate Debtor’s resolution process fall squarely within the exclusive jurisdiction of the NCLT under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The Court reiterated that when such issues arise during CIRP or liquidation, constitutional writ intervention is impermissible, as the IBC provides a comprehensive mechanism for redressal through its appellate framework.
The Single-Judge Bench of Justice Arun Kumar, while examining a writ petition challenging the refusal to restore a lease necessary for the Corporate Debtor’s revival, held that the question of restoration must be evaluated in accordance with applicable governmental policies and the objectives of the insolvency framework. The Court emphasised that matters concerning possession, occupation, or lease restoration of Corporate Debtor assets during CIRP or liquidation lie exclusively before the NCLT, and a writ petition on such issues is not maintainable when a statutory appellate remedy under Section 61 of the IBC is available.
The Petitioner, a real estate company undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016, had approached the High Court challenging the cancellation of its lease deed by the development authority and the dismissal of its revision petition by the State Government. The Petitioner sought quashing of the cancellation order, recalculation of dues as per the lease terms and Government policy, and restoration of the plot in question, which formed a crucial asset in the pending resolution process before the Adjudicating Authority.
It was noted that during CIRP, the Resolution Professional had invited resolution plans, and one such plan submitted by the Resolution Applicant was approved by the Committee of Creditors (CoC) and placed before the NCLT for final approval. The cancellation of the lease deed by the development authority had, however, created a significant hurdle in the resolution process, as the project land could not be treated as an asset of the Corporate Debtor, thereby threatening the viability of the entire resolution plan and the interests of the homebuyers.
The Court observed that the Greater Noida Industrial Development Authority, the Resolution Professional, the Resolution Applicant, and the representatives of homebuyers had entered into an agreement on 10 July 2025, pursuant to the directions of the Court. Under this agreement, the outstanding dues were recalculated based on the Government Order dated 21 December 2023, issued following the Amitabh Kant Committee Report. The Resolution Applicant had agreed to deposit 25% of the total dues amounting to ₹20.00 crores, which was duly deposited with the Registrar General of the Court.
During proceedings, multiple impleadment applications were filed by a rejected resolution applicant and an alleged homebuyer, both opposing the petition. The Court held that disputes regarding rejection of claims or resolution plans fell within the exclusive jurisdiction of the Adjudicating Authority under Section 60(5) of the IBC and could not be entertained under Article 226 of the Constitution. Consequently, the impleadment applications were dismissed as misconceived.
The Court further held that restoration of the cancelled lease was essential for successful implementation of the resolution plan and revival of the stalled housing project, as liquidation of the Corporate Debtor would irreparably harm the interests of homebuyers. Noting that the State authorities had failed to consider the binding effect of the Government Order dated 21 December 2023 while dismissing the revision, the Court set aside the impugned order.
The High Court directed the release of the deposited amount to the development authority and ordered that upon such release, the authority must proceed to restore the lease deed in favour of the Corporate Debtor in terms of clause 17 of the said Government Order. It was clarified that the deposit made by the Resolution Applicant did not create any indefeasible right for approval of its resolution plan, which remained subject to adjudication by the NCLT in accordance with the IBC. The petition was accordingly disposed of with these directions, preserving the statutory domain of the Adjudicating Authority over the insolvency resolution process.
Mr. Prakhar Saran Srivastava, Mr. Tarun Agrawal, Advocates, represented the Petitioner.
Mr. Ayush Mishra, Ms. Shreya Gupta, Mr. Abhinav Gaur, Ms. Anjali Upadhya, Mr. Namit Srivastava, Ms. Parul Srivastava, Mr. Pawan Kumar Tripathi, Mr. Prashant Mishra, Mr. Vineet Pandey, Advocates and Mr. Atul Ojha, C.S.C., appeared for the Respondents.
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