Case Law Details
HDFC Bank Ltd Vs Atul Kumar Kansal & Ors (NCLAT Delhi)
New Delhi: The National Company Law Appellate Tribunal (NCLAT) in Delhi has dismissed an appeal by HDFC Bank Ltd., which sought the exclusion of certain mortgaged units from the resolution plan of a Corporate Debtor undergoing the Corporate Insolvency Resolution Process (CIRP). The tribunal upheld the Adjudicating Authority’s decision, ruling that the bank lacked the legal standing to raise such an objection in this context, as its mortgage rights stemmed from a transaction with a third party, not directly with the Corporate Debtor concerning the resolution plan.
HDFC Bank had appealed against an order dated March 7, 2025, passed by the Adjudicating Authority (National Company Law Tribunal), which had rejected the bank’s application. HDFC Bank claimed to hold a mortgage over units with a super area of 8702 sq. ft. located on the sixth floor of Universal Business Park. These specific units were conveyed through a deed executed on October 14, 2015, in favour of M/s Nayanika Holdings Pvt Ltd.
The bank’s primary contention was that since it held a mortgage over these units, they should not have been included as part of the Corporate Debtor’s resolution plan. HDFC Bank’s sole prayer was for the exclusion of these specific mortgaged units from the approved plan.
The Respondent in the appeal, likely representing the Corporate Debtor or the resolution process, argued that the resolution plan had already received the approval of the Adjudicating Authority back in 2021. It was submitted that a subsequent remittance of the matter to the Committee of Creditors was limited solely to the consideration of claims of certain financial creditors, including Kotak Mahindra Bank Ltd., and the plan was approved thereafter. The Respondent contended that HDFC Bank had no legal standing (locus standi) to file an objection against a resolution plan that had already been formally approved.
The NCLAT examined the facts, noting that the loan agreement and the document creating the mortgage on the units were executed between HDFC Bank and M/s Nayanika Holdings Pvt Ltd. Crucially, the tribunal observed that there was no Tripartite Agreement involving the Corporate Debtor, M/s Nayanika Holdings Pvt Ltd, and HDFC Bank concerning these units or the mortgage.
The NCLAT reviewed the observations made by the Adjudicating Authority in its order. The Adjudicating Authority had correctly pointed out that the dispute regarding the mortgaged units appeared to be between HDFC Bank and M/s Nayanika Holdings. The Adjudicating Authority had found that it was not within its purview in the Corporate Debtor’s CIRP to determine such a disputed issue between the bank and a third party (Nayanika Holdings). Furthermore, the Adjudicating Authority had concluded that HDFC Bank lacked the locus standi to object to a resolution plan that had already been approved by the Committee of Creditors (CoC). The Adjudicating Authority had also referenced its earlier order from June 11, 2021, which had limited the scope of issues that could be raised by objectors at that stage to only the claims of financial creditors.
Aligning with the Adjudicating Authority’s reasoning, the NCLAT held that HDFC Bank, not being a unit holder or having direct rights in the units stemming from the Corporate Debtor, could not object to the units being considered within the resolution plan. The tribunal noted that the resolution plan was approved by unit holders who held valid conveyance deeds or builder buyer agreements, implying their recognised stake in the units.
The NCLAT concurred that HDFC Bank had no standing to object to the resolution plan which had already received CoC approval. The tribunal was of the view that HDFC Bank’s appropriate legal remedy lies against M/s Nayanika Holdings Pvt Ltd, the entity with whom the loan agreement was executed and from whom the mortgage rights by way of deposit of title deeds were obtained.
HDFC Bank had cited a previous judgment of the NCLAT in Deepak Sakharam Kulkarni vs. Manoj Kumar Agarwal (2024 SCC OnLine 2562), specifically relying on paragraphs 176 and 218 of that order. However, the NCLAT distinguished this precedent. It clarified that the observations in Deepak Sakharam Kulkarni were made in the context of a person claiming rights in units that were included in a resolution plan but over which the Corporate Debtor itself did not possess rights. The NCLAT found that the facts of the present case were different, as it involved a mortgage claimed by HDFC Bank against a third party (Nayanika Holdings), not directly against the Corporate Debtor in relation to the units within the CIRP. Therefore, the NCLAT concluded that the Deepak Sakharam Kulkarni judgment did not support HDFC Bank’s position in the present matter.
Finding no error in the Adjudicating Authority’s decision to reject HDFC Bank’s application, the NCLAT dismissed the appeal. The tribunal, however, added a clarification stating that its dismissal of the appeal would not preclude HDFC Bank from pursuing any legal remedies available to it against M/s Nayanika Holdings Pvt Ltd in accordance with law. The judgment clarifies that a charge or mortgage created by a third party on assets later included in a Corporate Debtor’s resolution plan cannot automatically grant the mortgagee the right to object to the plan if they do not have a direct claim or recognized status (such as a financial or operational creditor) within the Corporate Debtor’s insolvency process concerning those assets.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
Heard Learned Counsel for the Appellant as well as Learned Counsel for the Respondent. This Appeal has been filed against an order dated 07.03.2025 by which order Adjudicating Authority has considered and rejected the objection filed by I.A. No. 3778 of 2022 by the HDFC Bank. The Appellant’s case is that Appellant has mortgage with units having super areas 8702 sq. ft. at sixth floor of Universal Business Park, with regard to which conveyance deed was executed in favour of M/s Nayanika Holdings Pvt Ltd on 14.10.2015. It is submitted that the Appellant having mortgage over the said units, the said unit could not be made part of the resolution plan and the only prayer of the Appellant is that the said unit be excluded from the resolution plan.
Learned Counsel for the Respondent submits that in the present case, the plan was earlier approved by the Adjudicating Authority in 2021 and matter was remitted to the Committee of Creditors for consideration of claim of certain Financial Creditor including Kotak Mahindra Bank Ltd. Subsequently, after the said plan has been approved. It is submitted that Appellant has no locus to file any objection.
Learned Counsel for the Respondent submits that the remittance by the Adjudicating Authority was limited to be purpose of the consideration of the claim of Financial Creditor and thereafter the plan was approved. We have considered submission of the Appellant and perused the record.
Appellant claims having mortgage rights on the units which was sold to M/s Nayanika Holdings Pvt Ltd on 14.10.2015. The conveyance deed which was executed, there was no Tripartite Agreement between the Corporate Debtor M/s Nayanika Holdings Pvt Ltd and the bank. The agreement which is the basis of the claim is the loan agreement executed by M/s Nayanika Holdings Pvt Ltd in favour of the HDFC Bank. The Adjudicating Authority in paragraph 26 of the order has made following observations:
“…
26. As can be seen from the aforesaid documents enclosed by the Applicant Bank with the IA, the loan agreement as well as the document recording the mortgaging of the unit no. 618- 626 located at 6th Floor of Universal Business Park was executed between the Applicant Bank and Nayanika Holdings, and was not a tripartite agreement involving the Corporate Debtor. Apparently, as per the stand taken by Applicant itself, it is not open for this Tribunal to determine the disputed issue between the Applicant and Nayanika Holdings. It is for the Applicant to resort to the remedy available to it before the appropriate forum in accordance with law to seek its relief. We find merit in the contention of the RP that the Applicant Bank has no locus to object to a resolution plan which already stands approved by the CoC. Furthermore, as already noted in the order dated 11.06.2021 of this court, no other issue would be raised by any objector nor decided by CoC. In the wake, I.A. 3778/2022 stands dismissed.”
The Appellant when is not the unit holder or any rights in the units except the mortgage right cannot be heard in asking to exclude the unit. When the units were taken consideration in the resolution plan and resolution plan was approved by the unit holders, who either had conveyance deed or builder buyer’s agreement. The Adjudicating Authority has rightly observed that the Applicant bank has no locus to object to the resolution plan which already stand approved by the Committee of Creditors. The Adjudicating Authority has also noticed that by an earlier dated 11.06.2021 of Adjudicating Authority, no other issues were allowed to be raised by an objector apart from claim of Financial Creditors. We thus, are of the view that remedy of the Appellant is against the M/s Nayanika Holdings Pvt Ltd with whom loan agreement was executed by deposit the title deed. The Appellant cannot raise any objection in the resolution plan or with regard to unit. We do not find any error in the order of Adjudicating Authority, rejecting the application.
However, this shall not preclude the Appellant to take such remedy in law as permissible against the M/s Nayanika Holdings Pvt Ltd.
The Appellant has also relied on judgment of this Tribunal in Deepak Sakharam Kulkarni vs. Manoj Kumar Agarwal in 2024 SCC OnLine 2562, he is relied on paragraph 176 and 218. The observations made by this Court, was in respect of the person who was claiming right in the units and those units were included in the plan to which the Corporate Debtor had no rights, in the above background the observations in paragraph 176 and 218 has been made and the said judgment does not come to the aid of the Appellant in the facts of the present case.
The Appeal is dismissed.
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