Moratorium Doesn’t Protect Inaction: Supreme Court Upholds Termination of Defaulting Developer’s Agreement
This Supreme Court judgment clarifies that validly terminated contracts do not constitute "assets" of a corporate debtor under the IBC, and its moratorium does not revive extinguished rights. It reaffirms that NCLT cannot interfere with terminations based on pre-existing, non-insolvency-related defaults. Furthermore, High Courts retain constitutional jurisdiction to direct statutory authorities, even during moratorium.
Facts Of The Case:
The dispute originated from a 2005 Development Agreement between Kher Nagar Sukhsadan Co-operative Housing Society and developer AA Estates for redevelopment of a dilapidated Mumbai building declared dangerous under municipal laws. The agreement required completion within 24 months, but the developer failed to meet this timeline. A Supple...