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Anush Mathkar

Partner in Disputes practice at the Mumbai office of Cyril Amarchand Mangaldas. Anush can be reached at anush.mathkar@cyrilshroff.com

Court Deposit Not Payment: Delhi HC’s Key Ruling on Arbitration and Insolvency Intersection

Summary: The Delhi High Court, in McNally Bharat Engineering Company Limited v. Metso India Pvt. Ltd., has held that an amount deposited in court as a condition for stay of an arbitral award, pending a challenge under Section 34 of the Arbitration & Conciliation Act, does not amount to payment to the award-holder and remains an asset of the award-debtor. Therefore, upon the award-debtor going into CIRP under the Insolvency and Bankruptcy Code during the pendency of such challenge, if a claim is not submitted to the Resolution Professional and does not form part of an approved resolution plan, it stands extinguished. Consequently, the pending Section 34 petition challenging the underlying arbitral award is rendered infructuous, and the deposited amount is to be refunded to the award-debtor turned corporate debtor.

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Door to Civil Court Remains Open Despite Bar Under RERA for a Developer Seeking Permanent Injunction

Summary: The case considered whether a suit for a common law remedy, in particular, for permanent injunction could be sought before RERA or whether a civil court retains jurisdiction to entertain such a suit. The Court held that the equitable remedy of permanent injunction falls entirely outside the scope of the powers conferred under the RERA Act; hence the bar of jurisdiction of civil courts cannot be invoked to reject such a suit filed by the developer. For developers and promoters, this ruling reinforces their right to approach civil courts to protect their interests through permanent injunctions.

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Homebuyers under the Code: Judicial Calibration Between Protection and Process

Summary: Recent judicial developments in India are reshaping the treatment of homebuyers under the Insolvency and Bankruptcy Code, 2016. Courts have moved beyond merely recognising homebuyers as financial creditors to substantively distinguishing genuine homebuyers from speculative investors, ensuring the Code is not misused as a recovery tool. While admission into insolvency remains a narrow enquiry of debt and default, broader homebuyer protection is addressed within the resolution process through prospective directions, equitable exceptions for belated claims, and judicial intervention against third-party actions that threaten project viability  Alongside, consumer protection remedies under RERA and the Consumer Protection Act continue to offer parallel avenues for redressal. The evolving framework seeks to balance procedural discipline with fairness, ensuring genuine homebuyers are not left without effective remedies.

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Supreme Court Gives Insolvency Claims a Fresh Lease of Life: Debt Restructuring and Substantive Compliance

Summary: The recent decision of the Supreme Court in B. Prashanth Hegde v. State Bank of India recognises that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), that substantially complies with the requirements cannot be rejected merely due to insignificant errors or omissions. Further, debt restructuring can amount to acknowledgement of debt by the Corporate Debtor, extending the limitation period for filing such an application.

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