2025

Landmark judgment on Equitable Mortgage and Priority of Charge – The Cosmos Co. Operative Bank Ltd. Vs. Central Bank of India and Ors. – Supreme Court

/ 102 minutes of reading

This judgment covers:

A. A contract of sale/ an agreement of sale does not itself create any interest in or charge on any property
B. Concept of Legal Mortgage and Equitable Mortgage
B.1 Legal Mortgage
B.2 Equitable Mortgage
B.3 Distinction between a Legal Mortgage and an Equitable Mortgage
B.4 Nature of an Equitable Mortgage
C. Priority of First Charge/ Mortgage in case of multiple Equitable Mortgages are created
C.1 Any rights flowing from Equitable mortgages are only of personal character and only rights in personam
C.2 Equitable Mortgage being a right in personam will not be enforceable against successive mortgagees
C.3 Even if multiple equitable mortgages are created, the first charge will have priority
D. Section 78 of the Transfer of Property Act, 1882
E. Distinction between Mortgage by Deposit of Title Deeds under the English Law and under the Transfer of Property Act, 1882
E.1 A mortgage by deposit of title deeds is for all purposes a ‘legal mortgage’ and not an equitable mortgage
E.2 An equitable mortgage would be subservient to a legal mortgage
F. Concept of Mortgage by depositing of title deeds
G. Equitable Mortgages are very much recognized in India under the nomenclature of “charge” in terms of Section 100 of the Act, 1882
H. Recourses are available to the lenders/ Bank
I. A transaction evidenced by the prior unregistered document is valid in itself
J. Present case
K. Conclusion

Landmark judgment on Equitable Mortgage and Priority of Charge – The Cosmos Co. Operative Bank Ltd. Vs. Central Bank of India and Ors. – Supreme Court Read Post »

Whether Corporate Debtor has any right over land under Joint development Agreement (JDA) and whether the land is required to be kept outside the CIRP of the Corporate Debtor? – Sri Brindhavan Brick Works Vs. Mr. Ashish Vyas, RP of Mann Sarovar Properties Development Pvt. Ltd. – NCLT Chennai Bench

/ 5 minutes of reading

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Whether Corporate Debtor has any right over land under Joint development Agreement (JDA) and whether the land is required to be kept outside the CIRP of the Corporate Debtor? – Sri Brindhavan Brick Works Vs. Mr. Ashish Vyas, RP of Mann Sarovar Properties Development Pvt. Ltd. – NCLT Chennai Bench Read Post »

An application for initiation of CIRP against a Financial Service Provider can be filed by its Regulator only and not by any financial creditor – Database Trading Pvt. Ltd. Vs. Aneri Fincap Ltd. – NCLT Mumbai Bench

/ 1 minute of reading

An application for initiation of Corporate Insolvency Resolution Process in the matter of a financial service provider can be filed by its Regulator i.e. RBI only and not by any financial creditor. In view of this, the present application filed by a financial creditor, not by the Reserve Bank of India, is not maintainable in terms of the provisions of IB Code, 2016 read with Rule 5 of Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019. Hence, this application deserves to be dismissed.

An application for initiation of CIRP against a Financial Service Provider can be filed by its Regulator only and not by any financial creditor – Database Trading Pvt. Ltd. Vs. Aneri Fincap Ltd. – NCLT Mumbai Bench Read Post »

Fraud or collusion by Resolution Professional with the Corporate Debtor, or any other stakeholder involved in the CIRP concealment of material facts, non-adherence to significant CIRP Regulations etc. constitutes a material irregularity | If a material irregularity is established, the Adjudicating Authority is empowered under the IBC to take corrective measures – Mr. Amit Sangal Vs. Mr. Kairav Anil Trivedi IRP of Prince MFG Industries Pvt. Ltd. and Ors. – NCLAT New Delhi

/ 76 minutes of reading

Hon’ble NCLAT held that
(i) Any act of misrepresentation, concealment, or fraudulent conduct undermines the transparency and fairness of the process. Similarly, mismanagement of the corporate debtor during the CIRP can give rise to material irregularity. The resolution professional is entrusted with the responsibility of managing the affairs of the corporate debtor in a manner that preserves its value. Any instance of mismanagement, including diversion of funds, dissipation of assets, or any conduct that is detrimental to the corporate debtor, may be considered a material irregularity.
(ii) If a material irregularity is established, the Adjudicating Authority is empowered under the Code to take corrective measures. Such measures may include setting aside decisions taken during the CIRP, directing an investigation into the conduct of the resolution professional, or imposing sanctions on the parties involved.
(iii) All parties involved in the CIRP, including resolution professionals, creditors, and corporate debtors, must adhere to the highest standards of integrity and diligence to ensure that the insolvency resolution process is conducted in a manner that upholds the objectives of the Code and protects the interests of all stakeholders.

Fraud or collusion by Resolution Professional with the Corporate Debtor, or any other stakeholder involved in the CIRP concealment of material facts, non-adherence to significant CIRP Regulations etc. constitutes a material irregularity | If a material irregularity is established, the Adjudicating Authority is empowered under the IBC to take corrective measures – Mr. Amit Sangal Vs. Mr. Kairav Anil Trivedi IRP of Prince MFG Industries Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Amount invested in a Joint Venture (JV) project cannot be construed as Financial Debt even under Section 5(8)(f) of the Code as it does not have the commercial effect of a borrowing – Bridge and Building Construction Co. Pvt. Ltd. Vs. Runwal Realtors Pvt. Ltd. – NCLT Mumbai Bench

/ 6 minutes of reading

Hon’ble NCLT Mumbai Bench held that:
(i) The Applicant invested the money for developing the project in its capacity as partner of the Corporate Debtor for sharing profits and hence such investment would not fall within the definition of ‘financial debt’ under Section 5(8) of the Code.
(ii) The Applicant herein is a joint venture partner of the Corporate Debtor and has made its joint venture contribution for the development and construction of the Township Project which can by no stretch of imagination be treated as a ‘financial debt’ within the meaning of Section 5(8) of the Code.
(iii) The dispute between the parties is a contractual dispute and application under Section 7 of the Code would not be maintainable for any breach of the terms of the JVA

Amount invested in a Joint Venture (JV) project cannot be construed as Financial Debt even under Section 5(8)(f) of the Code as it does not have the commercial effect of a borrowing – Bridge and Building Construction Co. Pvt. Ltd. Vs. Runwal Realtors Pvt. Ltd. – NCLT Mumbai Bench Read Post »

Whether extension of timeline which is contemplated in the Expression of Interest (EoI) itself require the publication of a fresh Form G? – Brand Steel & Power Pvt. Ltd. Vs. Avishek Gupta and Ors. – NCLAT New Delhi

/ 42 minutes of reading

Hon’ble NCLAT held that modification of request for resolution plan and extension of timeline has been separately dealt in Regulation 36B. Applying the aforesaid analogy in Regulation 36A, it is clear that although any modification in the Invitation for Expression of Interest require publication of fresh Form G but Regulation 36A on its term does not contemplate publication of fresh Form G when timeline has been extended.

Whether extension of timeline which is contemplated in the Expression of Interest (EoI) itself require the publication of a fresh Form G? – Brand Steel & Power Pvt. Ltd. Vs. Avishek Gupta and Ors. – NCLAT New Delhi Read Post »

Can a Resolution Professional convene a CoC meeting, after submitting his/her resignation, for taking decision to discharge the Resolution Professional? – Victory Welfare Association Vs. Arunava Sikdar and Anr. – NCLAT New Delhi

/ 3 minutes of reading

The Hon’ble Appellate Tribunals holds that in view of the Clause 22A of the Schedule-I of the Insolvency Professionals Regulations, 2016, the RP was entitled to discharge his duties till the resignation was not accepted. Admittedly, the order has been passed by Adjudicating Authority on 22.01.2025 relieving the Resolution Professional. Thus, any action taken by RP prior to that cannot be said beyond his jurisdiction when the RP chooses to discharge his function. There was no prohibition in the Regulation to conduct the proceeding.

Can a Resolution Professional convene a CoC meeting, after submitting his/her resignation, for taking decision to discharge the Resolution Professional? – Victory Welfare Association Vs. Arunava Sikdar and Anr. – NCLAT New Delhi Read Post »

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