Commercial Space Allotted By Corporate Debtor Through Unregistered Allotment cannot Excluded From Resolution Plan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) ruled that commercial spaces allotted by a corporate debtor through unregistered allotment letters cannot be excluded from the resolution plan under insolvency proceedings. The case involved a dispute over whether such allotments constituted valid claims under the Insolvency and Bankruptcy Code (IBC). The tribunal held that only registered agreements could be treated as binding obligations on the corporate debtor. This decision reinforces the importance of proper registration of allotments to secure rights in insolvency cases. Legal experts believe the ruling ensures equitable treatment of creditors while maintaining the integrity of the resolution process. It sets a precedent discouraging informal or unregistered transactions, which could disrupt the insolvency framework. Stakeholders are advised to ensure compliance with registration requirements to safeguard their interests during debt resolutions.