Catalyst Trusteeship Ltd. v. Ecstasy Realty Pvt. Ltd.

 Background

Appeal against refusal to admit s. 7 IBC petition.

The respondent issued ₹600 crore worth of secured non-convertible debentures under a Debenture Trust Deed (DTD) dated 27.03.2018. Upon default in servicing interest, the debenture trustee recalled the loan and filed an application under s. 7 IBC. The NCLT dismissed the petition, holding that an 18-month moratorium pursuant to restructuring discussions existed. The NCLAT affirmed.

The debenture trustee challenged these findings.

 

Issues Framed

1. Whether restructuring discussions with one debenture holder amounted to a binding modification of the DTD negating default.
2. Whether the NCLT/NCLAT erred in refusing admission under s. 7 IBC.
 

Court’s Reasoning

1. Scope of s. 7 IBC

Relying on Innoventive Industries v. ICICI Bank (2018) 1 SCC 407, the Court reiterated that the Adjudicating Authority must only ascertain:

• existence of financial debt; and
• occurrence of default.

Pre-existing disputes are irrelevant in a s. 7 IBC proceeding.

 

2. No Valid Restructuring under the DTD

• Clause 33 of the DTD mandated modification only through prior written consent of debenture holders via a Special Resolution.
• No such resolution or written amendment existed.
• E-mails exchanged with one debenture holder (ECLF) did not bind other debenture holders absent authorization.
• Under s. 62 Contract Act, novation requires consensus of all contracting parties.
• Waiver under the DTD required express written waiver (Clause 37). None existed.

The Bombay High Court had already refused interim relief in a commercial suit challenging enforcement of the DTD, noting absence of valid modification. This was wrongly ignored by NCLT/NCLAT.

 

3. Perverse Findings by NCLT/NCLAT

The inference of a subsisting moratorium, collusion by the trustee, and “engineered default” was unsupported by record.

The Court held the concurrent findings to be “glaringly perverse” warranting interference.

 

Decision / Disposition

Orders of NCLT (03.02.2023) and NCLAT (16.04.2025) set aside.
Company Petition restored and directed to be admitted under s. 7 IBC.

 

Ratio

For admission under s. 7 IBC, the Adjudicating Authority need only ascertain existence of financial debt and default; unilateral restructuring discussions with one debenture holder, absent written modification in compliance with the Debenture Trust Deed and s. 62 Contract Act, do not negate default or bar initiation of corporate insolvency resolution process.

 

Case Details

Citation: 2026 INSC 186 
Decided on: 24 February 2026
Case Title: Catalyst Trusteeship Ltd. v. Ecstasy Realty Pvt. Ltd.
Court: Supreme Court of India
Bench: Sanjay Kumar & K. Vinod Chandran, JJ.

Comments

Post a Comment

Popular posts from this blog

The Director of Town Panchayat & Ors. v. M. Jayabal & Ors.

  Compassionate appointment, once accepted, cannot be re-opened to claim a higher post; belated claims defeat the very object of such appointment. Neutral Citation & Date:  2025 INSC 1423 · Decided on 12 December 2025 Case Title:   The Director of Town Panchayat & Ors. v. M. Jayabal & Ors.  (connected appeals) Court:  Supreme Court of India, Civil Appellate Jurisdiction Bench:  Rajesh Bindal, J.; Manmohan, J.   Background The respondents were dependants of deceased employees who had served as sweepers. Upon their fathers’ deaths, they applied for and were granted compassionate appointment as sweepers, which they accepted and joined. Several years later (after gaps of about three and nine years respectively), they filed writ petitions before the Madras High Court seeking appointment to the higher post of Junior Assistant, asserting that they were qualified at the time of initial appointment. The Single Judge allowed the claim, which was affi...
Read more

M/s Aarsuday Projects & Infrastructure (P) Ltd. v. Jogen Chowdhury & Ors.

  Background A PIL before the Calcutta High Court challenged a residential construction near  Visva-Bharati  University, alleging that it stood on ecologically sensitive “ khoai ” land and lacked competent permissions. The High Court ordered demolition, compensation, and action against officials. The developer, planning authority (SSDA), and flat purchasers appealed.   Issues Framed 1.  Whether the High Court was justified in concluding that the subject plot was “ khoai ” land warranting demolition. 2.  Whether the High Court correctly exercised PIL jurisdiction to order demolition based on the material on record. 3.  Whether the regulatory approvals and land-use permissions rendered the construction illegal.   Court’s Reasoning •  Nature of the land:  The Court held that there was  no clear, specific, or contemporaneous scientific evidence establishing that the  subject plot itself  was “ khoai ” land. Reports relied upon...
Read more

State of Uttar Pradesh & Ors. v. Bhawana Mishra(with Anshu Gautam & Ors.; Ankita Maurya & Ors.

  Mere admission to  Ayurvedic  Nursing Training does not confer a right to appointment; legitimate expectation fails where policy  and selection regime have materially changed Citation & Date:  2026 INSC 38; decided on  8 January 2026 Case Details Case Title:   State of Uttar Pradesh &  Ors . v.  Bhawana  Mishra (with  Anshu   Gautam  &  Ors . ;  Ankita   Maurya  &  Ors . ) Court:  Supreme Court of India, Civil Appellate Jurisdiction Bench:  Rajesh  Bindal , J.; Manmohan, J.   Background  Admissions were made to the  Ayurvedic  Nursing Training Course (2013–14) conducted by a government institution. Historically, candidates completing the course were appointed as  Ayurvedic  Staff Nurses. Subsequently, private institutions were permitted to conduct the course, significantly increasing the number of trained candidates. After completion of...
Read more

Reginamary Chellamani v. State rep. by Superintendent of Customs

  Prolonged incarceration of an  undertrial  under the NDPS Act, coupled with parity with a co-accused already enlarged on bail, justifies grant of regular bail notwithstanding seizure of commercial quantity; trial courts must scrupulously secure the accused’s right to legal representation.   Background The appellant was arrested in connection with an NDPS prosecution arising out of seizure of contraband allegedly exceeding commercial quantity. She was charged under  s. 8(c) read with ss. 20(b)(ii)(C), 22(c), 23, 28 & 29 NDPS Act , and  s. 135 Customs Act . Her application for regular bail was rejected by the Madras High Court. By the time the appeal was considered, the appellant had remained in custody for over  four years . A co-accused travelling on the same flight had already been granted bail by the Supreme Court.   Issues Framed 1.  Whether prolonged pre-trial incarceration can justify grant of regular bail in NDPS cases involving c...
Read more

Jagdeep Chowgule v. Sheela Chowgule & Ors.

  Background Disputes arising from a family settlement were referred to arbitration. Upon delay in making the award, an application for extension under  s. 29A Arbitration and Conciliation Act, 1996 was moved before the Commercial Court. Meanwhile, owing to resignation of the presiding arbitrator, a fresh appointment was made by the High Court under  s. 11 . The High Court thereafter held that only it had jurisdiction to extend time under  s. 29A , setting aside the Commercial Court’s order.   Issues Framed 1.  Whether an application under  s. 29 A( 4)  lies before the High Court merely because the arbitral tribunal was appointed under  s. 11 . 2.  Whether “Court” in  s. 29A  bears the meaning assigned in  s. 2(1)(e)  or requires contextual departure.   Court’s Reasoning •  Textual primacy of s. 2(1)(e):  The Court reaffirmed that the definition of “Court” in  s. 2(1)(e)  is exhaustive and gov...
Read more

M/s Jindal Equipment Leasing & Consultancy Services Ltd. v. Commissioner of Income Tax (Delhi-II), New Delhi

  M/s Jindal Equipment Leasing & Consultancy Services Ltd. v. Commissioner of Income Tax (Delhi-II), New Delhi (Along with C.A. Nos. 153–155 of 2026) Court:  Supreme Court of India Bench:  R.  Mahadevan , J.   Background The appellants, investment companies of the Jindal Group, held shares of Jindal Ferro Alloys Ltd. (JFAL) as part of promoter holding. Pursuant to a court-sanctioned scheme, JFAL amalgamated with Jindal Strips Ltd. (JSL), and shareholders of JFAL were allotted JSL shares in a fixed exchange ratio. For AY 1997–98, the  assessees  claimed exemption under  s. 47(vii) IT Act , which was denied by the AO on the ground that the JFAL shares were  stock-in-trade , taxing the differential as business income under  s. 28 IT Act . The Tribunal allowed the  assessees’ appeals without deciding the nature of holding; the High Court remanded for determination of whether the shares were capital assets or stock-in-trade, observin...
Read more

Gujarat Public Service Commission v. Gnaneshwary Dushyantkumar Shah & Ors.

  Case Details Citation:  2026 INSC 70 Decided on:  19 January 2026 Case Title:   Gujarat Public Service Commission v.  Gnaneshwary  Dushyantkumar  Shah &  Ors . Court:  Supreme Court of India Bench:   Pamidighantam  Sri  Narasimha , J.;  Alok   Aradhe , J.   Background The Gujarat Public Service Commission issued an advertisement dated 23.09.2015 for direct recruitment to various Professor posts, including Professor (Plastic Engineering), under the Government Engineering Colleges Recruitment Rules, 2012. Selection was prescribed solely through interview. The respondent-candidate participated, secured 28/100 marks against the prescribed minimum of 45, and was not selected. After being unsuccessful, she challenged the process by invoking the AICTE (Career Advancement Scheme) Regulations, 2012.   Issues Framed Whether the  AICTE All India Council for Technical Education   (Career Advancement Sche...
Read more

Rupesh Kumar Meena v. Union of India & Ors.

  Cadre allocation under the Civil Services attains finality once made; a candidate cannot, after long delay, claim an ‘insider’ vacancy merely because seniors declined or did not join.   Background The appellant, an IPS officer of the 2004 batch (ST category), was duly allocated the Tamil Nadu cadre. An ‘insider’ vacancy in the Rajasthan cadre for the same batch arose when a senior candidate ( Rishikesh   Meena ) declined to join and another senior candidate (Rajesh Kumar) litigated for the vacancy but subsequently joined the IAS, rendering his claim infructuous. Nearly six years later, the appellant—third in the merit order—claimed entitlement to the Rajasthan ‘insider’ vacancy. The Central Administrative Tribunal and the Delhi High Court rejected the claim.   Issues Framed Whether an IPS officer, already validly allocated a cadre, can seek re-allocation to an ‘insider’ vacancy years later on the ground that candidates senior in merit did not accept or ultimately d...
Read more

State of Himachal Pradesh v. Chaman Lal

Citation: 2026 INSC 57 Decided on: 15 January 2026 Court: Supreme Court of India Bench: B.V. Nagarathna J. and R. Mahadevan J. Background The respondent was accused of pouring kerosene on his wife,  Saro  Devi, and setting her on fire on 07.12.2009, causing about 70% burn injuries. She survived for over a month and succumbed on 15.01.2010. The trial court convicted the respondent under  s. 302 IPC  based primarily on a dying declaration recorded by a  Tehsildar . The High Court reversed the conviction and acquitted the respondent, extending the benefit of doubt. The State appealed.   Issues Framed 1.  Whether the High Court was justified in discarding the dying declaration recorded on 08.12.2009. 2.  Whether the prosecution proved the guilt of the respondent beyond reasonable doubt so as to warrant restoration of conviction under S.  302 IPC .   Court’s Reasoning Issue 1: Evidentiary value of the dying declaration •  Legal rule: ...
Read more

Habib Alladin & Ors. v. Mohammed Ahmed

  Background The first appellant, owner of a residential apartment complex, disputed the respondent’s claim that a portion of the ground floor constituted a mosque used for public prayers since 2008. Alleging obstruction in 2021, the respondent filed a  suit for perpetual injunction  asserting the premises to be a  wakf  by user . The appellants sought  rejection of plaint under Order VII Rule 11 CPC , contending that the property was neither notified nor registered as  wakf  and that the  Wakf  Tribunal lacked jurisdiction. The High Court dismissed the challenge, holding that the pleadings disclosed a  wakf  by user  under  s. 3(r)( i ),  Wakf  Act,  1995  .   Issues Framed 1.  Whether the  Wakf  Tribunal has jurisdiction under the  Wakf  Act, 1995 to entertain a suit for injunction simpliciter in respect of a property not included in the ‘list of  auqaf ’ or reg...
Read more