Indian Judgements

Indian Judgements

Execution of decree: Guidelines and Directions – Long battles made shorten

Execution of a decree for specific performance and possession of immovable property. The appellants, decree-holders, are seeking possession of land after a lengthy legal battle, which the respondents, obstructionists, are resisting. The core dispute revolves around whether the respondents are bona fide cultivating tenants and thus protected by the Tamil Nadu Cultivating Tenants’ Protection Act, 1955, which would impact the civil court’s jurisdiction to order their eviction. The Court examines the application of Section 47 and Order XXI Rules 97-101 of the Civil Procedure Code (CPC), which govern questions arising during execution, and ultimately concludes that the respondents’ claims appear to stem from collusion with the original vendors rather than a genuine independent right.

(A) Civil Procedure Code, 1908, Section 47, Order 21, Rule 22, Rule 35, Rule 97 to 103 – Execution of decree – Objections – Whether the courts below committed any error in upholding the objections raised by the respondent nos. 1 and 2 against execution of the decree on the claim of being in possession of the suit property in their capacity as cultivating tenants? – High Court and this Court had affirmed the decree of specific performance with possession in favour of the appellants in the year 2004 and 2006 respectively – Subsequently, the sale deed was executed by the Executing Court on 17.08.2007 thereby transferring title of the suit property to the appellants – Despite such confirmation of the decree and transfer of title in favour of the appellants, it is incomprehensible why a notice was sent to the vendors by the revenue authorities in 2008 – Further, the vendors gave “no objection” to the grant of certificate of possession to the respondent Nos. 1 and 2 from 1974 despite not having any authority to do so in light of the sale deed dated 17.08.2007.

Held that the aforesaid by no stretch of imagination can be construed to be a legal right of possession existing independently from the title of the vendors which has now stood transferred to the appellants – It is nothing but a case of apparent collusion between the vendors and the respondent Nos. 1 and 2 to deprive the appellants from availing the fruits of the decree in their favour – Impugned judgment passed by the High Court liable to be set aside – The order passed by the Executing Court also set aside –  The Executing Court shall now proceed to ensure that vacant and peaceful possession of the suit property is handed over to the appellants in their capacity as decree holders and if necessary, with the aid of police – This exercise shall be completed within a period of two months from today without fail.

(Para 67, 68, 78 and 79)

(B) Civil Procedure Code, 1908, Section 47, Order 21, Rule 22, Rule 35, Rule 97 to 103 – Execution of decree – Validity of decree – Whether the respondent Nos. 1 and 2 are entitled to the protection of the Tamil Nadu Cultivating Tenants’ Protection Act, 1955 and could the Executing Court have decided the question of validity of the decree on this ground? – Held that the respondent Nos. 1 and 2 cannot claim protection of the special legislation of 1955 for the period during which they were not registered as tenants cultivating the suit properties – Certificate that they are in possession of the suit properties since 1974 does not come to their aid as the said certificate does not establish any independent right of possession in favour of the respondent Nos. 1 and 2 –  Further, the certificate itself appears to have been obtained in collusion with the vendors who at the time of giving “no objection” had ceased to be the owners of the suit property – In such circumstances referred to above, find it extremely difficult to accept that the respondent Nos. 1 and 2 are bona fide cultivating tenants of the suit property and thus, the determination of the question of them being in possession of the same must necessarily go against them and in favour of the appellants – Therefore, there is no question of deciding the validity of the decree on the ground of being a nullity due to lack of jurisdiction of the civil court to evict cultivating tenants.

(Para 69 and 70)

(C) Civil Procedure Code, 1908 – Section 47, Order 21 Rule 97 – Execution of decree – Section 47 vis-à-vis Order XXI Rule 97  Held that if an application under Order XXI, Rule 97 is made, then its determination will be under Rule 101 and then Rule 103 further provides that where any application has been adjudicated upon under Rules 98 or 100, the order made thereon shall have the same force and will be subject to the same conditions as to an appeal or otherwise as if it were a decree – Under Section 47 of the CPC all questions relating to the execution, discharge or satisfaction of the decree, have to be determined by the executing court whereas under Rule 101 all questions including question relating to right, title or interest in the property arising between the parties to the proceedings have to be determined by the executing court – Section 47 is a general provision whereas Order XXI Rules 97 and 101 deal with a specific situation – Moreover, Section 47 deals with executions of all kinds of decrees whereas Order XXI, Rules 97 and 101 deal only with execution of decree for possession – Apart from that, earlier, i.e., prior to the amendment, every order falling under Section 47 was appealable (as the terms ‘decree” included the order under Section 47 of the CPC) whereas now only certain orders as provided for under Order XXI have been made appealable – Application of the respondents No. 1 and 2 under Section 47 of the CPC bearing R.E.A. No. 163 of 2011 was in substance an application for determination of their possessory rights under Order XXI Rule 97.

(Para 51 to 53)

(D) Civil Procedure Code, 1908, Section 47; vis-à-vis Order XXI Rule 101 – Execution of decree – Decree for specific performance and possession – Objection as to – According to the Executing Court, although the respondent nos. 1 and 2 herein were impleaded as parties in the execution petition filed by the appellants herein yet no notice was sent to them as there was no prayer made against them – Secondly, according to the Executing Court the respondent nos. 1 and 2 have been able to establish that they are in possession of the suit properties – In such circumstances, the objections raised by the respondent Nos. 1 and 2 herein under Section 47 of the CPC were upheld – Held that the Courts below proceeded absolutely on a wrong footing – What the courts below should have considered is the simple fact whether the obstruction at the end of the respondent nos. 1 and 2 of the execution of the decree of specific performance and possession of the suit property could be said to be bona fide and genuine – In other words, the consideration at the end of both the courts should have been whether the respondent nos. 1 and 2 herein being nephews of the original venders are acting in collusion with each other only with a view to frustrate and defeat the decree – Courts below failed to consider the following:

  1. The respondent Nos. 1 and 2 respectively are nephews of the vendors and claim to have come into possession of the suit property in the year 1983 when the suit was first instituted by the appellants before the ASJ.They were impleaded in the original suit as the defendant Nos. 3 and 4 respectively.
  1. The decree in favour of the appellants granting specific performance with possession was affirmed by the High Court on 19.03.2004 and the SLP against the order of the High Court stood dismissed on 20.01.2006. The respondent Nos. 1 and 2 respectively chose not to contest the original suit before the ASJ. They did not appear even before the High Court and this Court in the appeals filed by the vendors (judgment debtors).
  1. The respondent Nos. 1 and 2 were also impleaded in the execution petition bearing R.E.P. No. 237 of 2004 and the order of the High Court dated 21.02.2006 indicates that they had appeared through their advocate and were aware about the said execution petition.
  1. The Executing Court executed the sale deed on 17.08.2007 and ordered for delivery of possession of the suit property to the appellants. When such order was sought to be affected by the appellants along with the Village Administrative Officer, the respondent no. 1 obstructed the delivery of possession.
  1. Thereafter, the respondent Nos. 1 and 2 respectively filed an execution application R.E.A. No. 163 of 2011 on 12.03.2008 alleging fraud on the part of the appellants saying that they were not aware about the execution proceedings. At this stage, the respondent no. 2 brought onto the record for the first time that he along with the respondent no. 1 were cultivating the land constituting the suit property.
  1. The respondent Nos. 1 and 2 respectively, after seven months i.e. on 18.10.2008 filed a petition before the revenue authorities for inclusion of their names in the cultivation account of the suit property and prayed that the same be done retrospectively from the year 1974. Though, the revenue authorities only allowed for inclusion of their names from 2008 onwards yet they were granted certificate that they were in possession of the suit property from 1974 onwards. Such certificate was provided to them on the basis of the “no objection” given by the vendors (judgment debtors) as they were considered to be title holders of the said property. From the facts on record, it can be discerned that the revenue authorities were not made aware of the sale deed executed in favour of the appellants herein and that the title of the suit property stood transferred to them.

(Para 57 and 59)

(E) Civil Procedure Code, 1908, Section 47; vis-à-vis Order XXI Rule 101 – Execution of decree – Decree for specific performance and possession – Objection as to – 2Respondent Nos. 1 and 2 respectively, claiming to be cultivating tenants, had contended before the courts below that the civil court lacked jurisdiction to adjudicate on matters pertaining to possession of the suit property and eviction there from – The respondents submitted that the decree passed in the original suit was a nullity and therefore, the validity of the decree could be challenged even during the execution proceedings – Held that a harmonious reading of Section 47 with Order XXI Rule 101 implies that questions relating to right, title or interest in a decretal property must be related to the execution, discharge or satisfaction of the decree – The import of such a reading of the provisions is that only matters arising subsequent to the passing of the decree can be determined by an executing court under Section 47 and Order XXI Rule 101 – While determining a question under Section 47, an executing court cannot go behind the decree and question the correctness of the same – What flows from the position of law, is that the issues that ought to have been raised by the parties during the adjudication of the original suit cannot be determined by the executing court as such adjudication may undermine the decree itself – Benefit of Section 47 cannot be availed to conduct a retrial causing failure of realisation of fruits of the decree.

(Para 62 and 63)

(F) Civil Procedure Code, 1908, Section 47; Order 21 – Execution of decree – Guidelines and Directions – In Rahul S. Shah case this Court has provided guidelines and directions for conduct of execution proceedings – The relevant portion of the said judgment is reproduced below:

“42. All courts dealing with suits and execution proceedings shall mandatorily follow the below mentioned directions:

42.1. In suits relating to delivery of possession, the court must examine the parties to the suit under Order 10 in relation to third-party interest and further exercise the power under Order 11 Rule 14 asking parties to disclose and produce documents, upon oath, which are in possession of the parties including declaration pertaining to third-party interest in such properties.

42.2. In appropriate cases, where the possession is not in dispute and not a question of fact for adjudication before the court, the court may appoint Commissioner to assess the accurate description and status of the property.

42.3. After examination of parties under Order 10 or production of documents under Order 11 or receipt of Commission report, the court must add all necessary or proper parties to the suit, so as to avoid multiplicity of proceedings and also make such joinder of cause of action in the same suit.

42.4. Under Order 40 Rule 1 CPC, a Court Receiver can be appointed to monitor the status of the property in question as custodia legis for proper adjudication of the matter.

42.5. The court must, before passing the decree, pertaining to delivery of possession of a property ensure that the decree is unambiguous so as to not only contain clear description of the property but also having regard to the status of the property.

42.6. In a money suit, the court must invariably resort to Order 21 Rule 11, ensuring immediate execution of decree for payment of money on oral application.

42.7. In a suit for payment of money, before settlement of issues, the defendant may be required to disclose his assets on oath, to the extent that he is being made liable in a suit. The court may further, at any stage, in appropriate cases during the pendency of suit, using powers under Section 151 CPC, demand security to ensure satisfaction of any decree.

42.8. The court exercising jurisdiction under Section 47 or under Order 21 CPC, must not issue notice on an application of third-party claiming rights in a mechanical manner. Further, the court should refrain from entertaining any such application(s) that has already been considered by the court while adjudicating the suit or which raises any such issue which otherwise could have been raised and determined during adjudication of suit if due diligence was exercised by the applicant.

42.9. The court should allow taking of evidence during the execution proceedings only in exceptional and rare cases where the question of fact could not be decided by resorting to any other expeditious method like appointment of Commissioner or calling for electronic materials including photographs or video with affidavits.

42.10. The court must in appropriate cases where it finds the objection or resistance or claim to be frivolous or mala fide, resort to sub-rule (2) of Rule 98 of Order 21 as well as grant compensatory costs in accordance with Section 35-A.

42.11. Under Section 60 CPC the term “… in name of the judgment-debtor or by another person in trust for him or on his behalf” should be read liberally to incorporate any other person from whom he may have the ability to derive share, profit or property.

42.12. The executing court must dispose of the execution proceedings within six months from the date of filing, which may be extended only by recording reasons in writing for such delay.

42.13. The executing court may on satisfaction of the fact that it is not possible to execute the decree without police assistance, direct the police station concerned to provide police assistance to such officials who are working towards execution of the decree. Further, in case an offence against the public servant while discharging his duties is brought to the knowledge of the court, the same must be dealt with stringently in accordance with law.

42.14. The Judicial Academies must prepare manuals and ensure continuous training through appropriate mediums to the court personnel/staff executing the warrants, carrying out attachment and sale and any other official duties for executing orders issued by the executing courts.”

All the High Courts across the country directed to call for the necessary information from their respective district judiciary as regards pendency of the execution petitions – Once the data is collected by each of the High Courts, the High Courts shall thereafter proceed to issue an administrative order or circular, directing their respective district judiciary to ensure that the execution petitions pending in various courts shall be decided and disposed of within a period of six months without fail otherwise the concerned presiding officer would be answerable to the High Court on its administrative side – Once the entire data along with the figures of pendency and disposal thereafter, is collected by all the High Courts, the same shall be forwarded to the Registry of this Court with individual reports.

(Para 73 and 74)

Periyammal (Dead Thr. Lrs.) V. V. Rajamani And Anr. Etc.

Supreme Court: 2025 INSC 329: (DoJ 06-03-2025)

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Delayed Death: When ‘Attempted Murder’ Becomes More

Maniklall Sahu, the appellant, along with three co-accused, trespassed into the house of Rekhchand Verma, assaulted him with sticks and fisticuffs, and flung him from a terrace. The injured person, Rekhchand Verma, initially survived but was in a critical condition. He eventually succumbed to his injuries approximately nine months after the incident, dying on 8th November 2022 due to septicaemia and pneumonia, leading to cardiorespiratory arrest. The trial court had initially convicted the appellant under Section 302 of the Indian Penal Code (IPC) for murder. However, the High Court altered this conviction to Section 307 IPC for attempt to murder, sentencing the appellant to 7 years of rigorous imprisonment and a fine of Rs. 1,000/-. The appellant subsequently filed this appeal challenging the Section 307 IPC conviction.

Law Involved The primary legal provisions under consideration are Sections 299, 300, 302, and 307 of the Indian Penal Code (IPC).

Section 307 IPC (Attempt to Murder): This section deals with acts done with the intention or knowledge that it might cause death, and if death occurs, the act would be murder.

Section 299 IPC (Culpable Homicide): Defines culpable homicide.

Section 300 IPC (Murder): Specifies when culpable homicide amounts to murder, including acts done with the intention of causing death, or causing bodily injury sufficient in the ordinary course of nature to cause death, or knowing the act is so imminently dangerous that it will most probably cause death.

Section 302 IPC (Punishment for Murder): Prescribes the punishment for murder. The core legal question revolves around the “Application of Theory of Causation where death ensues after some delay” and whether the High Court correctly applied Section 307 IPC despite the victim’s eventual death.

Reasoning The Supreme Court critically analysed the High Court’s decision to alter the conviction from Section 302 IPC to Section 307 IPC, especially given the victim’s death.

  1. Medical Evidence and Causation: The Court reviewed extensive medical evidence, which consistently showed that the deceased, Rekhchand Verma, suffered severe injuries, including a head injury, spinal cord injury leading to paraplegia, and multiple complications such as infected bedsores, septic shock, and bilateral pneumonia. Medical experts testified that these complications were a direct result of the initial injuries sustained during the assault and were sufficient in the ordinary course of nature to cause death. The Court highlighted that the injured person received medical treatment for nine months before his demise. The Court concluded that the injuries suffered were grievous and that the death was a consequence of these injuries, with complications like septicaemia and pneumonia not breaking the chain of causation.
  2. High Court’s Error: The Supreme Court determined that the High Court committed a serious error in bringing the case under the ambit of “attempt to commit murder” (Section 307 IPC) on the premise that the victim survived for about nine months, and his death was due to complications during treatment and not directly from the initial injuries. The Supreme Court stressed that if the injury was fatal and intended to cause death, or if death occurred after some delay due to septicaemia or other complications stemming from the injury, the offence would fall under the first limb of Section 300 IPC (murder) [36a]. Furthermore, if the injuries were sufficient in the ordinary course of nature to cause death and death occurred due to septicaemia or other complications, the act would amount to culpable homicide punishable under Section 302 IPC, falling under the third limb of Section 300 IPC [36b, 37c, 37d].
  3. Jurisprudence on Delayed Death: Drawing on various precedents, the Court reiterated that delayed death or intervening medical conditions (like septicaemia or pneumonia) do not automatically absolve an accused of murder charges if the initial injuries were the proximate cause of death. The Court concluded that the cause of death was indeed due to the injuries suffered, and the contention that the death resulted from a lack of proper treatment or was disconnected from the initial assault was unfounded.

Holding The Supreme Court dismissed Maniklall Sahu’s appeal . While the appellant’s conviction under Section 307 IPC (attempt to murder) as altered by the High Court stands affirmed due to the dismissal of his appeal, the Supreme Court clearly stated that the High Court committed a serious error in altering the conviction from Section 302 IPC to Section 307 IPC . The Supreme Court’s detailed reasoning underscored that given the medical evidence and the established chain of causation, the offence should have been considered murder or culpable homicide amounting to murder, punishable under Section 302 IPC, because the injuries were sufficient in the ordinary course of nature to cause death.

Maniklall Sahu Vs State of Chhattisgarh

Supreme Court: 2025 INSC 1107: (DoJ 12-09-2025)

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Tender Troubles: Supreme Court Upholds Bid Sanctity, Overturns Rectification

The case originated from an electronic bid (No. 7 of 2023-24) issued by the Superintending Engineer and Project Director, Project Implementation Unit – I, Public Works (Roads) Directorate, Government of West Bengal, on 17.10.2023. The tender was for collecting Road User Fee (RUF) from commercial vehicles for 1095 days. The earnest money deposit was fixed at Rs. 25,00,000.00. Seven bidders participated. The technical bids were evaluated, and four bidders were technically qualified, including Prakash Asphaltings and Toll Highways (India) Limited (appellant) and Mandeepa Enterprises (respondent No. 1).

Financial bids were opened on 08.12.2023. The appellant, Prakash Asphaltings, was found to be the highest bidder (H1) with a quoted amount of Rs. 91,19,00,000.00 for 1095 days. Respondent No. 1, Mandeepa Enterprises, was the lowest bidder (H4) with an offered amount of Rs. 9,72,999.00 per day.

Respondent No. 1 subsequently claimed a typographical error in their financial bid, stating they intended to quote Rs. 106,54,33,905.00 for the entire contract period instead of Rs. 9,72,999.00 per day. They requested the tendering authority to treat the figure of Rs. 9,72,999.00 as a typographical error and read it as Rs. 106,54,33,905.00. The tendering authority rejected this request on 20.12.2023, stating that correction of a financial bid after opening was not possible and would impeach the sanctity of the tender process.

Aggrieved, Respondent No. 1 filed a writ petition (WPA No. 29001 of 2023) before a Single Judge of the High Court, which was dismissed on 03.01.2024, as the Single Judge found no scope for interference. Respondent No. 1 then filed an intra-court appeal (MAT No. 93 of 2024). A Division Bench of the High Court allowed the appeal on 23.02.2024, observing that the error in quoting the figure by respondent No. 1 was inadvertent. The Division Bench directed the tendering authority to evaluate Respondent No. 1’s BOQ at Rs. 106,54,33,905.00 and offer other bidders the opportunity to match this figure. This civil appeal was directed against the Division Bench’s judgment and order.

Law Involved

Clause 4(g) of the Notice Inviting Electronic Bid: This clause specifically states that any change in the template of the Bill of Quantity (BOQ) will not be accepted under any circumstances.

Clause 5B(v) of the Instructions to Bidders: This clause outlines that during bid evaluation, if bidders fail to submit supporting documents or original hard copies within the stipulated timeframe, their proposals will be liable for rejection.

Article 226 of the Constitution of India: Pertains to the High Court’s jurisdiction to issue writs.

Principles of Equity and Natural Justice in Tender Processes: The judgment refers to the importance of these principles in tender and contract awards, but also emphasises that these principles should be kept at a distance when there is a violation of rules.

Judicial Review of Administrative Action: The Court reiterated that judicial review in administrative action, particularly tenders, is limited to preventing arbitrariness, irrationality, bias, and mala fides. Courts should not interfere with a decision unless it is “unlawful” or “unsound”.

Public Interest: Tenders are a cornerstone of governmental procurement processes, aiming for competitiveness, fairness, and transparency in resource allocation. Adherence to rules and conditions and the sanctity of the tender process are paramount.

Reasoning The Supreme Court reasoned that the Division Bench’s interpretation was erroneous for several key reasons:

Sanctity of Tender Process: The Court held that allowing rectification of financial bids after they have been opened would impeach the sanctity and integrity of the entire tender process.

Strict Adherence to Tender Conditions: Clause 4(g) explicitly prohibits any change in the BOQ template under any circumstances. The Division Bench’s broad interpretation of “bona fide mistake” to allow rectification was held to be incorrect and would put “shackles on the functioning of the tendering authority”.

Nature of the Mistake: While Respondent No. 1 claimed an inadvertent mistake, it was effectively a unilateral or systematic computer typographical transmission failure, not one attributable to the tendering authority. Such a mistake, even if unintentional, cannot be a ground to allow post-bid modifications that would undermine the competitive bidding process.

Adverse Consequences to Public Exchequer: The Division Bench’s decision to re-evaluate Respondent No. 1’s bid at a significantly higher amount (Rs. 106,54,33,905.00) meant that the appellant, who was originally the H1 bidder, would be displaced. This would lead to a considerable loss of revenue to the state exchequer (approximately 15 crores) by not accepting the higher bid of the appellant and giving an opportunity to Respondent No. 1 to correct its bid post-opening.

Limited Scope of Judicial Review: The Court reiterated that interference by a writ court in ongoing tender processes is not permissible unless there is a clear violation of principles of natural justice, or the decision is arbitrary or mala fide. The Division Bench’s decision was deemed a clear violation of natural justice principles.

Non-Joinder of Party: The appellant (Prakash Asphaltings), as the highest bidder and a directly affected party, was not made a party respondent in the intra-court appeal before the Division Bench, which was viewed as prejudicial and a violation of natural justice.

Holding The Supreme Court allowed the civil appeal, thereby setting aside and quashing the judgment and order dated 23.02.2024 passed by the Division Bench of the High Court at Calcutta in MAT No. 93 of 2024. The Court sustained the order of the learned Single Judge dismissing the writ petition. Consequently, Prakash Asphaltings and Toll Highways (India) Limited (the appellant), being the H1 bidder, is to be awarded the contract in terms of the notice inviting electronic bid dated 17.10.2023. The Court also ruled that there shall be no order as to costs.

Prakash Asphaltings And Toll Highways (India) Limited Vs Mandeep Enterprises And Others

Supreme Court: 2025 INSC 1108: (DoJ 12-09-2025)

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“Speculative Investors” Barred from IBC Relief: Supreme Court Upholds Homebuyer Protections

Four appeals were heard together, arising from orders of the National Company Law Appellate Tribunal (NCLAT). The key appellants, Mansi Brar Fernandes and Sunita Agarwal, had entered into agreements with developers (Gayatri Infra Planner Pvt. Ltd. and Antriksh Infratech Pvt. Ltd., respectively) for property units. Both agreements included buy-back clauses and involved advance payments. The developers defaulted, and the appellants initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC). The NCLAT reversed the admission of these applications, branding the appellants as “speculative investors” rather than genuine homebuyers or financial creditors.

Law Involved: The central legal framework is the Insolvency and Bankruptcy Code, 2016 (IBC), specifically Section 7, which governs the initiation of the Corporate Insolvency Resolution Process (CIRP) by financial creditors. The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019, and the subsequent Amendment Act, are also critical. These amendments introduced a threshold requirement for allottees to file a Section 7 application (requiring at least 10% of allottees or 100 allottees). The Court frequently referenced its earlier judgment in Pioneer Urban Land and Infrastructure Ltd v. Union of India, which distinguishes between genuine homebuyers and speculative investors. The judgment also emphasizes the Right to Shelter as a fundamental right under Article 21 of the Constitution and the role of the Real Estate (Regulation and Development) Act, 2016 (RERA).

Reasoning: The Supreme Court deliberated on the distinction between “speculative investors” and “genuine homebuyers” within the context of the IBC. It observed that the IBC is intended as a collective mechanism to revive viable projects and safeguard the fundamental right to shelter of genuine homebuyers, not as a recovery tool or a bargaining chip for individuals. The legislative intent behind recognizing allottees as financial creditors was to protect genuine homebuyers, while simultaneously preventing misuse by speculative investors seeking premature exits or exorbitant returns, which had burdened the real estate sector and the adjudicatory machinery.

The Court provided criteria to identify speculative investors, including: agreements that substitute possession with buy-back or refund options, insistence on refunds with high interest, purchase of multiple units (especially in double digits), demanding special rights or privileges, deviations from the RERA Model Agreement, and unrealistic interest rates or promises of returns. The transaction entered into by Mansi Brar Fernandes, involving a buy-back clause and the pursuit of commercial returns rather than possession, led the Court to conclude that she was indeed a speculative investor. Similarly, Sunita Agarwal’s agreement for an “investment” with a 25% per annum return over 24 months, coupled with a buy-back clause, indicated a speculative intent.

While affirming the NCLAT’s finding that the appellants were “speculative investors,” the Supreme Court clarified that the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2019, was indeed applicable to the facts of the present case, correcting the NCLAT’s reasoning on this point [19, 20, 35, 36, 48(ii)]. The Court applied the doctrine of Actus Curiae Neminem Gravabit (an act of the Court shall prejudice no one) to address the procedural issues related to the Ordinance’s applicability and the delay it caused.

Holding: The Supreme Court affirmed the NCLAT’s findings that Mansi Brar Fernandes and Sunita Agarwal were “speculative investors” and therefore not entitled to initiate proceedings under Section 7 of the IBC [25, 34, 48(i)]. Consequently, the Court upheld the NCLAT’s orders setting aside the admission of their Section 7 applications by the NCLT [48(i)]. However, the Court clarified that the Ordinance/Amendment Act was applicable to the case, although this correction in reasoning did not alter the ultimate outcome given the appellants’ status as speculative investors [48(ii)]. The appellants remain free to pursue their remedies through other appropriate legal forums, without being barred by limitation [48(i)].

Mansi Brar Fernandes Vs Subha Sharma And Anr.

Supreme Court: 2025 INSC 1110: (DoJ 12-09-2025)

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