Legal Review and Analysis of Satinder Singh Bhasin vs Col Gautam Mullick & Ors 2026 INSC 104
Synopsis
This Supreme Court judgment deals with the insolvency of real estate developers under the Insolvency and Bankruptcy Code, 2016. It addresses critical issues such as the maintainability of a joint insolvency petition against multiple, interlinked corporate debtors, the determination of the threshold of 100 allottees required under Section 7, and the factual assessment of default and project completion. The Court upheld the initiation of the Corporate Insolvency Resolution Process (CIRP) against two related companies, dismissing the appeals by their erstwhile directors.
1. Basic Information of the Judgment
Case Title: Satinder Singh Bhasin v. Col. Gautam Mullick & Ors
INSC Citation: 2026 INSC 104
Court: Supreme Court of India
Coram: Justice Sanjay Kumar and Justice K. Vinod Chandran (Division Bench)
Jurisdiction: Civil Appellate Jurisdiction
Civil Appeal Nos.: 13628, 13779, and 13812 of 2025
Date of Judgment: January 2, 2026
2. Legal Framework and Precedents
Governing Statute:
The Insolvency and Bankruptcy Code, 2016 (the "Code").
Key Provisions:
Section 7: Initiation of Corporate Insolvency Resolution Process (CIRP) by a financial creditor.
Second Proviso to Section 7(1): Stipulates the threshold requirement for allottees in a real estate project—either 100 allottees or 10% of the total allottees, whichever is less.Subsidiary Rules: National Company Law Tribunal Rules, 2016 (Rule 28 & 29).
Key Legal Issues: The maintainability of a joint insolvency application by homebuyers against multiple corporate debtors, the calculation of the allottee threshold, and the definition of default in the context of incomplete real estate projects.
Relevant Precedents Relied Upon:
Manish Kumar v. Union of India: Held that the threshold of 100 allottees under Section 7 must be determined as on the date of filing the application, not at the time of hearing or admission.
Surendra Trading Company v. Juggilal Kamlapat Jute Mills Co. Ltd.: Clarified that an application under Sections 7, 9, or 10 of the Code is considered validly filed only upon removal of defects and registration as per NCLT Rules.
Edelweiss Asset Reconstruction Company Ltd. v. Sachet Infrastructure Pvt. Ltd. (NCLAT) & Mamatha v. AMB Infrabuild Pvt. Ltd. (NCLAT): Established the principle of "Group CIRP" or joint insolvency proceedings against multiple corporate debtors who are intrinsically linked in a single real estate project.
3. Relevant Facts of the Case
Project & Parties: A composite real estate project, 'Grand Venezia Commercial Tower', was launched in 2005 by Bhasin Infotech and Infrastructure Pvt. Ltd. ("Bhasin Ltd."). Grand Venezia Commercial Towers Pvt. Ltd. ("Grand Venezia Ltd.") was later granted exclusive marketing rights.
Allottees' Grievance: 141 allottees of commercial office spaces filed a joint petition under Section 7 of the IBC against both companies. Their grievances included non-completion of construction, non-issuance of a final completion certificate by the Uttar Pradesh State Industrial Development Authority (UPSIDA), non-execution of tripartite sublease deeds, and stoppage of assured returns since 2014.
Admission of Petition: The National Company Law Tribunal (NCLT) admitted the petition on December 4, 2023, initiating CIRP against both corporate debtors. The NCLAT upheld this decision.
Appellants' Contention: The erstwhile directors of the corporate debtors appealed to the Supreme Court, arguing:
(i) The threshold of 100 allottees was not met as many had settled or taken possession.
(ii) A single petition cannot be filed against two separate legal entities.
(iii) Construction was complete and possession offered, so no "default" existed.
(iv) Post-filing alterations to the list of petitioner-allottees constituted an abuse of process.
4. Issues Before the Supreme Court
Whether the company petition met the threshold requirement of 100 allottees as mandated by the second proviso to Section 7(1) of the IBC?
Whether the alterations made to the cause-title (list of petitioners) after the initial filing but before registration amounted to an abuse of process?
Whether a joint insolvency petition under Section 7 of the IBC is maintainable against two distinct corporate debtors?
Whether, on facts, a "default" existed under the IBC, i.e., had the corporate debtors failed to deliver possession of completed units to the financial creditor-allottees?
5. Ratio Decidendi of the Court
The Supreme Court dismissed all appeals, upholding the NCLT and NCLAT orders, and held:
Threshold Met on Filing Date: Relying on Manish Kumar, the Court held the crucial date for counting the 100-allottee threshold is the date of filing the petition. As 103 allottees filed the petition, the threshold was satisfied. Subsequent settlements or withdrawals were irrelevant for the maintainability at the admission stage.
No Abuse of Process in Amending Petition: Applying Surendra Trading and NCLT Rules (Rule 28), the Court held that until a petition is registered after curing defects, amendments (including to the party array) are permissible. The changes made were during the defect-curing stage, hence valid.
Joint Insolvency Petition is Maintainable: The Court affirmed the "Group CIRP" principle. It found the two corporate debtors intrinsically linked: Bhasin Ltd. was the developer; Grand Venezia Ltd. (incorporated just a month prior) was the exclusive marketer with common directors; payment receipts and communications were interchangeable. Their fates were intertwined in a single project, justifying a joint process for value maximization.
Default Established – Project Incomplete: The Court conducted a thorough factual review and found the corporate debtors in default. Key findings included:
No final completion or occupancy certificate from UPSIDA.
A 2018 Commissioner's Report stated units were unfit for occupation.
A 2025 Court-appointed Observer's Report detailed incomplete construction, missing basic amenities, and uninhabitable conditions from the 3rd to the 15th floors.
Clause in the UPSIDA lease mandated possession only after execution of tripartite deeds, which never happened.
Assured returns had stopped since 2014.
The so-called "possession letters" were either notional or for non-relevant units and had no legal sanctity without the tripartite deeds.
6. Legal Principles Established/Reaffirmed
The judgment reaffirms and clarifies several principles under IBC jurisprudence:
Static Threshold Test: The threshold for allottees under Section 7 is to be assessed only at the petition filing stage. Post-filing developments do not affect the petition's maintainability.
Procedural Flexibility Pre-Registration: Amendments to a petition, including the party array, are allowed during the defect-curing period before formal registration under NCLT Rules.
Doctrine of "Group CIRP" or Joint Insolvency: Where multiple corporate entities are so intrinsically interconnected in a common project or enterprise that their assets and liabilities are intermingled, a joint insolvency petition against them is maintainable. This is to ensure holistic resolution and value maximization.
Substance Over Form in Real Estate Default: For allottees under IBC, "default" is not merely a monetary shortfall. It encompasses the failure to deliver a completed, habitable unit as per agreement. Possession without legal sanctity (e.g., without mandatory tripartite deeds) and physical completion is not delivery in the eyes of the law.
7. Court's Examination and Analysis
The Court's analysis was meticulous and multi-layered:
Step 1 – Procedural Compliance: It first addressed the procedural objections (threshold and amendment) by applying clear statutory rules and precedents, establishing a sound procedural foundation.
Step 2 – Jurisdictional Issue (Joint Petition): It then analyzed the relationship between the two corporate debtors through documentary evidence (Joint Venture Agreement, common directorship, interchangeable communications). It upheld the NCLAT's "Group CIRP" approach, citing prior approvals of this principle by the Supreme Court itself.
Step 3 – Factual Inquiry into Default: This formed the core of the analysis. The Court did not rely solely on the NCLT record but also examined subsequent reports (Observer's Report) as the appellants themselves had obtained interim orders by claiming completion. It contrasted the appellants' documentary claims (part-completion certificates, possession letters) with:
(a) Contractual clauses (UPSIDA lease terms),
(b) Statutory requirements (Occupancy Certificate),
(c) Independent ground reports (Commissioner 2018, Observer 2025).
It found the latter overwhelmingly disproved the claims of completion and lawful possession.
8. Critical Analysis and Final Outcome
Critical Analysis:
This is a robust judgment that strengthens the position of homebuyers as financial creditors. It prevents corporate debtors from using technicalities (like separate legal entities) to evade insolvency when they operate as a single economic unit. The Court’s willingness to look at ground realities through the Observer's Report, rather than relying solely on contradictory paperwork, ensures substantive justice. It reinforces the IBC's objective as a tool for resolution, not just for financial creditors in traditional loans, but also for consumers in incomplete projects. The decision also provides much-needed clarity on procedural aspects during the filing stage.
Final Outcome:
The Supreme Court dismissed all three Civil Appeals (13628, 13779, and 13812 of 2025).
The judgment of the NCLAT dated October 29, 2025, and the NCLT order dated December 4, 2023, were upheld.
The Corporate Insolvency Resolution Process (CIRP) against both M/s. Grand Venezia Commercial Towers Pvt. Ltd. and M/s. Bhasin Infotech and Infrastructure Pvt. Ltd. was confirmed.
The offer by appellant Satinder Singh Bhasin to deposit ₹15.62 crores was rightly rejected as based on an incorrect premise.
(MCQs)
1. As per the Supreme Court's ruling, for determining the threshold of 100 allottees under the second proviso to Section 7(1) of the IBC, the crucial date is?
A) The date of the hearing before the NCLT.
B) The date of admission of the petition by the NCLT.
C) The date of filing the application.
D) The date of the NCLAT's appellate order.
2. The Supreme Court approved the concept of "Group CIRP" or a joint insolvency petition against multiple corporate debtors primarily based on which finding?
A) The companies had the same registered office address.
B) The companies were intrinsically linked and operated as a single economic unit in the project.
C) The companies had identical shareholding patterns.
D) The companies were in the same line of business.
3. Which rule of the NCLT Rules, 2016, did the Court interpret to allow amendments to the list of petitioners before the registration of the petition?
A) Rule 25
B) Rule 28
C) Rule 30
D) Rule 32
4. The Supreme Court found that a key condition for lawful possession of the units, which remained unfulfilled, was?
A) Payment of municipal taxes by the allottee.
B) Execution of tripartite sublease deeds involving the UPSIDA.
C) Internal fit-out of the units by the allottee.
D) Registration of a sale deed only between the developer and allottee.