Pushp Ratna Realty Pvt Ltd v. Kamal Nayan Mishra and Ors

What happened

The company's real estate project 'Lush by Pushparatna' began in 2009–10, and disputes among earlier shareholders and management led to litigation, arbitration, FIRs and investigations. CIRP was initiated by the NCLT, Indore on 16 October 2024 with a moratorium under section 14, and challenges to it were dismissed by the NCLAT and by the Supreme Court on 20 May 2025 and 23 June 2025. The resolution plan was approved by the NCLT, Indore on 9 March 2026, and the assets were handed over to the successful resolution applicant on a clean-slate basis. The petitioner, as the corporate debtor in its new form, said that several cases (including RCS A/425/2026, MJC AV/62/2024, AC/128/2024, Q/R-1/2026, MJC AV/71/2024, MJC AV/181/2026 and B-121/26-27) were begun or continued by the erstwhile management and their relatives after approval, and that on 15 May 2026 the VI Civil Judge, Junior Division, Indore ordered that any alienation of the suit land would be subject to lis pendens under section 52 of the Transfer of Property Act. It relied on sections 31, 32A, 231 and 238 of the IBC and on National Spot Exchange v. Anil Kohli that what cannot be done directly cannot be done indirectly.

Questions before the court

• Can the High Court under Article 226 protect the new management from pending and fresh proceedings relating to the pre-resolution period, and what must the other forums do?

Why the court ruled this way

The Court said the availability of an alternative remedy is not an absolute bar where proceedings are alleged to be wholly without jurisdiction and in contravention of a statutory embargo, citing Whirlpool Corporation (paragraph 13). A reading of sections 31, 32A and 238 shows that on approval the corporate debtor makes a clean-slate transition, so that a resolution applicant is not saddled with surprise claims or legacy litigation, and the continuation of pre-resolution claims in collateral forums defeats that protection (paragraph 16). Ghanshyam Mishra, JSW Steel v. Pratishtha Thakur Haritwal and Vaibhav Goel held that claims not forming part of the plan stand extinguished and no proceedings on them can be started or continued (paragraphs 17 to 21). Collateral proceedings of this kind constitute an indirect challenge to the finality of the NCLT's order (paragraph 18). The Court recorded its observations, including that the corporate debtor in its new form enjoys protection under sections 31, 231 and 238, that collateral multiplication of proceedings lacking bona fides is an abuse of process, and that interim orders, including on lis pendens, passed without first deciding maintainability are illegal and void (paragraph 22).

Controlling point

The proceedings are to be tested first for maintainability under the IBC and limitation, without any view on their merits.

Order and next steps

Without expressing any opinion on the merits, the petition was disposed of with directions that the Courts and authorities concerned first consider maintainability in light of the IBC, including limitation, in accordance with law and the observations made; liberty was granted to the petitioner to approach them for vacation of adverse interim orders; and the Court clarified that it did not express any opinion on the merits of the impugned proceedings.

Practical implications

A successful resolution applicant facing legacy suits and complaints can place the approved plan and the NCLT order before each forum and ask it to decide maintainability first, and to vacate interim orders passed without doing so.

Limits of this ruling

• The Court did not quash any proceeding, did not decide what part of any claim falls outside the plan, and left the merits and limitation questions to the forums concerned.