In real estate projects, a single insolvency petition under Section 7 of the Insolvency & Bankruptcy Code is maintainable against more than one corporate entity if they are intrinsically connected in the execution and marketing of the project 

The Supreme Court in the case of Satinder Singh Bhasin vs Col. Gautam Mullick [Civil Appeal No. 13628 of 2025] dated January 02, 2026, has granted relief to the homebuyers and held that in real estate projects, a single insolvency petition under Section 7 of the Insolvency & Bankruptcy Code is maintainable against more than one corporate entity if they are intrinsically connected in the execution and marketing of the project. 

The Court applied the group of companies’ doctrine to invoke a joint CIRP against corporate debtors whose business operations are intertwined, and noted that since the developer (Bhasin Ltd.) and marketing company (Grand Venezia Ltd) had common directors, issued interchangeable communications to allottees, and were operationally intertwined, both companies were intrinsically connected in the execution and marketing of the project. 

The Court observed that if two corporate debtors collaborate for developing land and allotting premises to allottees, the application under Section 7 of the Code would be maintainable against both of them jointly and not individually against one or the other. The Court, therefore, upheld the NCLAT’s ruling, which has permitted a joint Corporate Insolvency Resolution Process (CIRP) against two corporate entities that were intrinsically connected to the real estate project. 


Unsecured money brought into a company by its promoters to meet a bank’s lending condition does not qualify as a deposit under the Companies Act, 2013

The National Company Law Tribunal (NCLT) Mumbai Bench, in the case of Vimla T Dedhia vs Ansumera Realty & Infra Pvt Ltd [Company Application 370 of 2022 In Company Petition 412 of 2021] dated January 21, 2026, has held that unsecured money brought into a company by its promoters to meet a bank’s lending condition does not qualify as a deposit under the Companies Act, and that repayment proceedings under the deposit provisions cannot be maintained. 

The NCLT observed that once the transaction is covered by the statutory exclusion, the amount so received cannot be treated as a ‘deposit’ within the meaning of Section 2(31) of the Companies Act, 2013. The Tribunal said that Section 73 of the Companies Act, 2013, which regulate acceptance and repayment of deposits, are not attracted, and the transaction in question is, therefore, an exempted transaction under the Companies Act, 2013. 

The NCLT noted that promoter funds brought in pursuant to a stipulation imposed by a lending bank fall within the prescribed exclusion under the deposit rules and therefore cease to be deposits. In absence of amount being ‘deposit’, the invocation of Section 73(4) and 76(2) of the Companies Act, 2013 is wholly unsustainable. The Tribunal also noted that the transactions related to a period prior to 2015, while the petition was filed only in 2021. There was nothing on record to show any acknowledgment of liability or a continuing cause of action. 


Determination by a competent authority on the adequacy of stamp duty on an instrument attains legal finality if it is not challenged through the prescribed statutory procedures and within the limitation period specified in the Maharashtra Stamp Act, 1958

The Bombay High Court in the case of Kolte Patil Developers vs State of Maharashtra [Writ Petition No. 11145 of 2014] dated February 03, 2026, has held that a determination by a competent authority on the adequacy of stamp duty on an instrument attains legal finality if it is not challenged through the prescribed statutory procedures and within the limitation period specified in the Maharashtra Stamp Act, 1958. Any subsequent action to reopen such a concluded matter, including exercising revisional powers under Section 53A of the 1958 Act must be initiated and completed within the six-year limitation period from the date of the original certification. 

Furthermore, the Court explained that the statutory powers granted to a specifically designated authority, such as the “Registering Officer” under Section 33A of the 1958 Act, must be exercised by that authority alone and cannot be assumed by a different, albeit superior, officer. An order passed by an authority lacking such specific statutory competence is without jurisdiction and void. 

The Court observed that the order which rejected the audit objection, constituted a final adjudication that the instrument was properly stamped, and this order attained finality in law. While the State could reopen the matter, it had to act strictly within the statutory framework. The revisional power under Section 53A of the Maharashtra Stamp Act, which allows for the correction of such orders, is subject to a six-year limitation period from the date of certification. 

In this case, the Court found that the six-year period expired in August 2012, but the impugned recovery order was passed on 26 April 2014, well beyond this deadline. Furthermore, the Court analysed Section 33A and noted that the power to impound a registered instrument is explicitly vested in the “Registering Officer”. The instrument was registered by the Sub-Registrar, whereas the impugned order was passed by the Joint District Registrar, who was not the “Registering Officer” for that specific document. 

The Court concluded that supervisory control does not confer the statutory power of a designated authority, and therefore, the action taken by the Joint District Registrar under Section 33A was without jurisdiction. The Court also dismissed the respondents’ argument regarding an alternative remedy, stating that the writ jurisdiction can be exercised when the challenge is to the fundamental jurisdiction of the authority and is based on an action barred by limitation. 

The Court therefore quashed the order passed by the Joint District Registrar, considering that same was issued without jurisdiction and was barred by limitation. The Court directed that the amount deposited by the petitioner be refunded with any accrued interest. 


Revenue authorities acting under Sections 149 and 150 of the Maharashtra Land Revenue Code, 1966, are not vested with the jurisdiction to adjudicate complex questions of title, the validity of testamentary succession, or the enforceability of civil court decrees, as these matters fall exclusively within the domain of competent civil courts 

The Bombay High Court in the case of Meena A. Rizvi vs State of Maharashtra [Writ Petition No. 1365 of 2012] dated February 04, 2026, has held that the power of revenue authorities under Sections 149 and 150 of the Maharashtra Land Revenue Code, 1966, is strictly limited to updating revenue records for fiscal and administrative purposes based on the acquisition of rights. These authorities are not empowered to adjudicate upon the title or substantive rights of the parties to immovable properties, as this jurisdiction is vested exclusively in the civil courts. 

Consequently, the Court held that when a claim for mutation is founded upon a registered Consent Decree passed by a competent civil court, which has attained finality, the revenue authorities are duty-bound to give effect to it for the limited purpose of mutation. The Court said that Revenue Authorities cannot sit in appeal over the decree, question its legality, re-examine the underlying transaction, or refuse to act upon it by delving into issues such as testamentary succession, the authority of vendors, or the validity of the decree’s registration, as these are matters beyond their statutory competence.

The Court observed that the legal position governing mutation entries in revenue records is well-settled; they are maintained primarily for fiscal and administrative purposes and do not, by themselves, create, confer, or extinguish title to the property. The Court clarified that revenue authorities acting under Sections 149 and 150 of the Maharashtra Land Revenue Code, 1966, are not vested with the jurisdiction to adjudicate complex questions of title, the validity of testamentary succession, or the enforceability of civil court decrees, as these matters fall exclusively within the domain of competent civil courts. 

The Court pointed out that the revenue authorities had travelled far beyond their limited jurisdiction by entering into an elaborate examination of the Petitioner’s title, the authority of her vendors, the effect of prohibitory orders, and the legality of the registration of the Consent Decree, which the Court deemed an impermissible exercise amounting to sitting in appeal over a judicial decree. 

The Court therefore quashed all three impugned orders, and directed that Mutation Entry No. 2248 in the Property Register Card for the subject property in favour of the Petitioner shall be restored. It clarified that this restoration is purely for fiscal and administrative purposes and does not confer, declare, or extinguish title, nor does it prejudice the right of any party to seek appropriate relief before a competent civil court. The City Survey Officer, was also directed to implement this order by making the necessary entries within four weeks. 


A suit seeking specific performance of an agreement to sell shops that were already being used for business cannot be tried by a regular civil court and must be placed before a Commercial Court 

The Rajasthan High Court in the case of Mohsin Samdani vs. Sajjad Hussain Damami [S.B. Civil Misc. Appeal No. 1555/2025] dated January 29, 2026, has held that a suit seeking specific performance of an agreement to sell shops that were already being used for business cannot be tried by a regular civil court and must be placed before a Commercial Court. The Court observed that once a dispute falls within the Commercial Courts Act, the civil court lacks jurisdiction to try the suit. 

The Court observed that when facts establish that the suit property is being used for trade and business purposes at the time of the dispute, the jurisdiction of regular Civil Court is strictly ousted. Moreover, when a commercial dispute is filed in a civil court, the suit must be returned in exercise of the powers under Order 7 Rule 10 CPC. 

The Court found that the proposed buyers themselves had admitted in the plaint that they were using the shops for their trade for more than a decade, including when the agreement was signed. A perusal of the record shows that appellants have admitted in the plaint that they have been using the suit premises for the purposes of their trade and commerce for the last more than 10 years. 

Thus, the Court concluded that the dispute concerning the specific performance of the agreement relating to sale of the suit premises is a commercial dispute and must be adjudicated by competent Commercial Court.


A complaint under Section 138 of the Negotiable Instruments Act, 1881, is not maintainable by a third party even if the transaction affects him and that the same must be filed either by the payee or the holder in due course of the cheque

The Allahabad High Court in the case of Rajesh Kukreja vs State of UP [Criminal Revision No. 2776 of 2013] dated January 28, 2026, has held that a complaint under Section 138 of the Negotiable Instruments Act, 1881, is not maintainable by a third party even if the transaction affects him and that the same must be filed either by the payee or the holder in due course of the cheque. The Court observed that an authorised representative of the payee or holder of the cheque can initiate proceedings, being the power of attorney holder or the authorised signatory of the company, but the complaint is still to be in the name of the payee or holder of the cheque.

The Court perused Section 142 of the NI Act, which governs the cognizance of offences and noted that the Act explicitly mandates that “no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque”. The Court explained that, under Sections 7 and 9 of the Act, a Payee is the person named in the instrument to whom the money is directed to be paid, and a Holder in Due Course is a person who lawfully possesses the cheque for consideration and is entitled to the amount. 

Thus, the Court concluded that a complaint under Section 138 NI Act is not maintainable by a third party and that it must be filed by the payee or the holder in due course of the cheque. The Court further clarified that even if a person is ‘indirectly affected’ by the transaction, they remain a stranger to the legal requirements of Section 138 if they do not qualify as the payee or holder in due course.


REGULATORY UPDATES

SEBI mandates enhanced compliance for pledge & invocation of securities through depository system, ensuring adherence to Indian Contract Act 

The Securities & Exchange Board of India (SEBI) vide its Circular No. HO/47/14/12(1)2026-MRD-POD2/I/4229/2026 dated February 06, 2026, has addressed the framework for pledging of shares through the depository system as prescribed in paragraph 4.13 of the SEBI Master Circular for Depositories dated December 03, 2024, read with Regulation 79 of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 (DP Regulations). It requires depositories to make provisions in their respective bye-laws for the manner of creating and invoking a pledge in accordance with Section 12 of the Depositories Act, 1996 and the DP Regulations. 

The Circular referred to Sections 176 and 177 of the Indian Contract Act, 1872, which lay down the rights of the pawnor and pawnee, and require the pawnee to give a reasonable notice of sale to the pawnor prior to selling the pledged assets. In order to ensure compliance with these provisions in the framework for pledge of securities through depositories, the Circular mandates the insertion of additional paragraphs after paragraph 4.13.2 in the Master Circular. 

Specifically, the Pledge Request Forms of the depositories must provide for the pledger and pledgee to undertake that the pledgee will provide reasonable notice to the pledger and comply with the requirements of Sections 176 and 177 of the Indian Contract Act, 1872. Both parties must also undertake to abide by the provisions of the Indian Contract Act, 1872, the Depositories Act, SEBI Regulations, circulars, and bye-laws in force from time to time, as may be applicable. 

The depositories are required to maintain a standardized format of the Pledge Request Form. At the time of invocation of pledge, the depositories must send an intimation or notification to both pledger and pledgee confirming that the pledge has been invoked and the pledgee has been recorded as “beneficial owner” in terms of Regulation 79(8) of the DP Regulations. 

Depositories are also advised to make necessary amendments to relevant bye-laws and rules, carry out system changes if required, and bring the provisions of this circular to the notice of their participants and disseminate the same on their websites. The provisions of this circular are to be implemented on or before April 6, 2026. 

Click here to read/ download the original circular


RBI integrates Voluntary Retention Route (VRR) with General Foreign Portfolio Investors (FPIs) Debt Investment Limits and enhances flexibility for Exits effective April 2026

The Reserve Bank of India (RBI) vide its Notification No. RBI/2025-26/205 dated February 06, 2026, has announced changes to the regulatory framework governing investments by Foreign Portfolio Investors (FPIs) under the Voluntary Retention Route (VRR) for debt instruments. The circular refers to the Statement on Developmental and Regulatory Policies announced as part of the Bi-monthly Monetary Policy Statement for 2025-26 and draws attention to the Foreign Exchange Management (Debt Instruments) Regulations, 2019, and the Master Direction – Reserve Bank of India (Non-resident Investment in Debt Instruments) Directions, 2025, as amended from time to time. 

Key changes: 

The investment limits under the VRR shall be subsumed under the investment limit for FPI investments under the General Route. Consequently, all investments through VRR in Central Government securities (including Treasury Bills), State Government Securities, and corporate debt securities shall be reckoned under the investment limit for the respective securities under the General Route.

The FPIs that have availed retention periods longer than the minimum retention period stipulated in the Directions shall have the option of liquidating their portfolio, fully or partly, and exiting the VRR after the end of the minimum retention period. 
These Directions shall come into force with effect from April 01, 2026. All existing investments under VRR as on April 01, 2026, shall be transferred to the respective investment limits under the General Route. The amendments being made to the Master Direction are provided in the Annex to the circular. Authorised Dealer Category-I banks are directed to bring the contents of this circular to the notice of their constituents and customers concerned. 

The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions or approvals, if any, required under any other law. The Annex to the circular details the specific amendments to the Master Direction, including the subsuming of VRR investment limits under the General Route and the option for FPIs to exit after the minimum retention period if they had initially opted for a longer retention period.

Click here to read/ download the original notification 


SEBI mandates Net Asset Value (NAV) reporting of Alternative Investment Fund (AIF) Units to Depositories 

The Securities & Exchange Board of India (SEBI) vide its Circular No. HO/19/34/11(8)2025-AFD-POD1/I/4335/2026 dated February, 2026, has addressed the reporting of the value of units of Alternative Investment Funds (AIFs) to Depositories. It referred to Regulation 10 of the SEBI (Alternative Investment Funds) Regulations, 2012, which permits AIFs to raise funds from Indian, foreign, or non-resident Indian investors through the issuance of units. The value of these units is determined based on the valuation of the investment portfolio of the AIF or its scheme. 

Specifically, Regulation 23(2) mandates that Category I and Category II AIFs must undertake valuation of their investments at least once every six months by an independent valuer appointed by the AIF, with the period extendable to one year upon approval of at least seventy-five percent of the investors by value. Regulation 23(3) requires Category III AIFs to ensure that the calculation of Net Asset Value (NAV) is independent from the fund management function and that such NAV is disclosed to investors at intervals not longer than a quarter for close-ended funds and not longer than a month for open-ended funds. 

The Circular notes that, pursuant to Regulation 10(aa) and a previous SEBI circular (now subsumed in the Master Circular for AIFs dated May 07, 2024), AIFs are required to issue units in dematerialized (demat) form. In order to enhance transparency and operational efficiency by leveraging depository infrastructure, the Circular specifies that AIFs, through their Registrars and Transfer Agents (RTAs), must upload the latest available NAV corresponding to each ISIN of AIF units in the depository system before May 01, 2026, or within 30 days from the date of valuation of the investment portfolio, whichever is later. 

The valuation date is defined as the date of the valuation report in cases where an independent valuer is used, or the date the valuation is documented in internal records where internal valuers are used. The manager of the AIF is made responsible for ensuring timely and accurate uploading of the NAV. 

The depositories are directed to build the necessary infrastructure for uploading NAV by RTAs and for reflecting the same in the depository system. They are also required to display a disclaimer stating that the NAV shown is based on the valuation methodology and accounting practice followed by the respective AIF, and to refer investors to their fund documents for more details. 

Additionally, depositories must make necessary amendments to their Bye-laws, Rules, and Regulations to implement these provisions and disseminate the circular to their members and on their websites. The trustee or sponsor of the AIF must ensure that the Compliance Test Report, as prepared by the manager in accordance with Chapter 15 of the Master Circular for AIFs, includes compliance with the provisions of this circular. The provisions of the circular come into force with immediate effect. 

Click here to read/ download the original circular