The National Company Law Tribunal, Mumbai Bench, orders reversal of unauthorized mutation entries during CIRP under IBC Section 14
In a significant judgment delivered on November 11, 2025, the Mumbai Bench of the National Company Law Tribunal (NCLT) ruled against unauthorized mutation entries made in land revenue records during the moratorium period of a Corporate Insolvency Resolution Process (CIRP). The case, Unity Small Finance Bank Limited v. Kaved Realty Private Limited, revolved around the illegality of mutation entries executed for Kaved Realty's property following the initiation of CIRP, despite the prohibitive moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.
The bench comprising Sh. Prabhat Kumar, Member (Technical), and Sh. Sushil Mahadeorao Kochey, Member (Judicial), concluded that the mutation entry No. 9317 dated March 26, 2025, was in direct violation of the moratorium provisions. The tribunal ordered the immediate reversal of these entries to maintain the integrity of the CIRP and ensure compliance with the statutory requirements.
The Corporate Insolvency Resolution Process for Kaved Realty Private Limited began on October 23, 2024, initiating a moratorium period that prohibits any proceedings or asset transfers concerning the corporate debtor. Despite this, the name of Kaved Realty was struck off from the 7/12 land records, further complicating the resolution process.
The tribunal underscored the critical role of Section 14 in safeguarding the assets of the corporate debtor during insolvency proceedings. It deemed any action to alter or dispose of the debtor’s assets during this period as illegal and void. The judgment also addressed the non-cooperation from the suspended management of Kaved Realty, which had been impeding the efficient conduct of the CIRP.
The tribunal directed the concerned authorities to refrain from continuing with the mutation entries and emphasized the need for restoring the corporate debtor’s name in the land records to facilitate the resolution process and ensure clarity for prospective resolution applicants and registered valuers.
The ruling reinforces the sanctity of the moratorium under the Insolvency and Bankruptcy Code, emphasizing its role in protecting corporate debtors’ assets and ensuring orderly insolvency proceedings. This decision sets a precedent for similar cases, where unauthorized asset alterations during moratorium periods are contested.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Moratorium under Section 14 prohibits any action relating to transfer, encumbrance, or disposal of the Corporate Debtor's assets during the moratorium period.
Statutory provisions: Insolvency and Bankruptcy Code, 2016 Section 14
