2 hrs ago
NCLAT Denies GNIDA, NOIDA Secured Creditor Status
Shubhkamna Buildtech borrowed money and then could not pay all its dues.
The company entered a legal process to find a solution for its debts.
GNIDA and NOIDA said they should be paid like secured creditors because they had leased land to the company.
Secured creditors usually get paid earlier than many other creditors.
NCLAT said the lease agreements did not give the authorities a current security claim over the land.
The clauses they cited would matter only if certain future events, such as a mortgage foreclosure, happened.
The tribunal also said that simply having a legal power to recover unpaid dues did not create a contractual charge.
Homebuyers had voted overwhelmingly against giving the authorities secured status.
The tribunal found that the approved plan was not unfair or discriminatory toward GNIDA and NOIDA.
NCLAT dismissed GNIDA and NOIDA appeals in Shubhkamna Buildtech’s insolvency proceedings.
GNIDA claimed about Rs 60.6 crore, while NOIDA claimed about Rs 99.3 crore from the developer.
The authorities were classified as operational creditors under a 2019 resolution plan, receiving Rs 18.5 crore and Rs 25 crore respectively.
NCLAT ruled that the lease deeds created no present contractual security interest over Shubhkamna’s property.
The tribunal said the 2026 IBC amendment applied retrospectively and excluded security interests created solely by operation of law.
- Who
- The Greater Noida Industrial Development Authority (GNIDA), the New Okhla Industrial Development Authority (NOIDA), Shubhkamna Buildtech Pvt Ltd, homebuyers, and NCLAT.
- What
- NCLAT dismissed GNIDA and NOIDA’s appeals seeking recognition as secured creditors in Shubhkamna Buildtech’s insolvency proceedings.
- Where
- The dispute concerned leasehold land in Greater Noida and NOIDA’s Section 137, Uttar Pradesh, and was decided by NCLAT.
- When
- The appeals were dismissed on Wednesday, September 16; the resolution plan had been approved in 2019, and the article refers to the IBC Amendment Act, 2026.
- Why
- The tribunal found that the lease deeds did not create a present contractual security interest and that statutory recovery powers alone were insufficient under the amended IBC.
GNIDA and NOIDA’s Position
NCLAT’s Position
Nature of the authorities’ claims
GNIDA and NOIDA’s Position
GNIDA and NOIDA argued that statutory recovery powers and lease-deed clauses created a security interest, making them secured creditors.
NCLAT’s Position
NCLAT held that recovery as arrears of land revenue was only a collection method and that the lease clauses did not create a present charge over the property.
Reliance on earlier rulings
GNIDA and NOIDA’s Position
The authorities relied on Supreme Court decisions in Rainbow Papers and GNIDA v. Prabhjit Singh Soni, as well as an earlier NCLAT ruling involving NOIDA.
NCLAT’s Position
NCLAT said the 2026 IBC amendment changed the applicable position and that the earlier NOIDA case involved a lease deed with a clear, unconditional contractual first charge.
Treatment under the resolution plan
GNIDA and NOIDA’s Position
The authorities sought to move from operational creditor status to secured creditor status, which would generally give them higher priority in distribution.
NCLAT’s Position
The tribunal found that the plan was not arbitrary or discriminatory, noting that homebuyers rejected the proposal and had accepted a larger haircut while contributing more money to complete the project.
Key facts
- Developer
- Shubhkamna Buildtech Pvt Ltd
- GNIDA claim
- About Rs 60.6 crore
- NOIDA claim
- About Rs 99.3 crore
- GNIDA allocation
- Rs 18.5 crore under the 2019 resolution plan
- NOIDA allocation
- Rs 25 crore under the 2019 resolution plan
- Homebuyer vote
- 95.6% of participating homebuyers rejected secured creditor status for the authorities
- Relevant law
- Insolvency and Bankruptcy Code, 2016, including Sections 3(30), 3(31), and 53
Quotes
NCLAT bench
The tribunal bench deciding GNIDA and NOIDA’s appeals.
“a contingent right of priority in a hypothetical future scenario and it does not, constitute a present, subsisting charge securing the premium, interest and lease rent arrears that in fact make up GNIDA’s and NOIDA’s claims as secured creditors in these proceedings.”
indianexpress.com
“An overwhelming 95.6% of the homebuyers who participated in the voting rejected the proposal”
indianexpress.com
Sources
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