Tribunal upholds unified Corporate Insolvency Resolution Process, dismisses demands for project-wise authorised representatives, individual account disclosures, and earmarking of assets under IBC framework
In a significant ruling dated October 5, 2026, the National Company Law Tribunal (NCLT), New Delhi Bench, dismissed an application filed by allottees of the "Spaze Arrow" project of Spaze Towers Private Limited undergoing Corporate Insolvency Resolution Process (CIRP). The allottees sought appointment of separate authorised representatives for each real estate project, a detailed forensic audit with creditor-wise financial disclosures, and exclusive protection of sale proceeds from a specific corporate asset.
The bench comprising Judicial Member Mr. Mahendra Khandelwal and Technical Member Mr. Atul Chaturvedi held that the Insolvency and Bankruptcy Code, 2016 (IBC) and associated CIRP Regulations provide for representation of a class of creditors through a single authorised representative (AR). The tribunal reaffirmed that the statutory scheme does not allow ad hoc or project-wise appointment of observers or representatives outside the prescribed mechanism. The existing AR, Mr. Shaikh Nafis Anjum, was validly appointed by the Committee of Creditors (CoC) and confirmed by the tribunal in December 2024, and no material was produced to demonstrate any statutory infirmity or failure on his part.
Regarding the demand for a fresh, more granular forensic audit to trace amounts paid and received by each financial creditor, the tribunal observed that the CoC had already approved and conducted a comprehensive forensic/transaction audit by M/s Kansal Singla & Associates. This audit covered the period from April 1, 2019, to October 21, 2024, and was placed before the CoC in July 2025. The forensic audit did not identify any transactions attracting avoidance or fraudulent transfer provisions under Sections 43, 45, 49, 50, or 66 of the IBC. The tribunal underscored that a fresh forensic audit cannot be ordered merely because some creditors desire further detail, absent any material indicating the necessity for deeper scrutiny.
The applicants' request for disclosure of individual account statements of other financial creditors was also rejected. The tribunal noted that the Resolution Professional (RP) has the statutory duty to collate and verify claims under the IBC and CIRP Regulations. Mere suspicion or generalized demand does not entitle one creditor to access the financial details of others within the same class.
Further, the tribunal declined the plea to earmark Rs. 23 crore allegedly due to the applicants by sale of the former corporate office of the debtor. It emphasized that claims of financial creditors do not confer exclusive rights over specific assets of the corporate debtor unless backed by valid security interest or statutory entitlement. The insolvency estate's assets must be managed collectively in accordance with the IBC and the resolution process, not through piecemeal allocation to individual creditor groups.
The tribunal also took note of prior litigation history, including the rejection of attempts to confine the CIRP to the Spaze Arrow project alone by the NCLAT and the Supreme Court. It observed that the corporate debtor's CIRP continues as a single process covering all projects, consistent with statutory provisions.
In conclusion, the NCLT dismissed the application (I.A. 844 ND 2025 in C.P. IB 284 (PB) of 2021), reinforcing the statutory framework under the Insolvency and Bankruptcy Code that governs insolvency resolution, creditor representation, forensic audits, and asset management. The decision reiterates that CIRP is a time-bound, regulated process that cannot be fragmented based on project-specific grievances without statutory sanction.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - In CIRP of a real estate company, allottees of one project cannot seek project-wise separate authorised representative/observer, fresh forensic audit, disclosure of individual account statements of other creditors, or earmarking of sale proceeds of a particular asset exclusively for themselves, in absence of statutory basis and after completion of the prescribed CIRP process.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 7, 21, 43, 45, 49, 50, 60(5), 66; CIRP Regulations 4A, 8A, 16A, 16C; Companies Act, 2013 Section 208
Vivek Khanna v. Gaurav Katiyar, (NCLT)(New Delhi Bench) : Law Finder Doc Id # 3001084
