# In the matter of Municipal Corporation of Greater Mumbai(MCGM) Vs. Abhilash Lal and Ors. Civil Appeal No. 6350 of 2019

> SC judgment dated 2019-11-15. Citation: TCN-2019-SC-00012. The Municipal Corporation of Greater Mumbai (MCGM) appealed against the order of the National…

- **Court:** SC
- **Order date:** 15 Nov 2019
- **Citation:** TCN-2019-SC-00012
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/municipal-corporation-of-greater-mumbaimcgm-vs-abhilash-lal-and-ors-civil-appeal-88983e44

## Summary

### Background

The Municipal Corporation of Greater Mumbai (MCGM) appealed against the order of the National Company Law Appellate Tribunal (NCLAT), which rejected MCGM's plea regarding a resolution plan approved by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC). The dispute arose from a contract between MCGM and SevenHills Healthcare (P.) Ltd. (SevenHills), where SevenHills agreed to develop MCGM's land and construct a 1500-bed hospital. SevenHills faced insolvency proceedings initiated by Axis Bank due to its inability to repay debts. MCGM issued a show cause notice to terminate the contract due to non-completion of the project and non-payment of lease rent. The NCLT admitted the insolvency petition and appointed a Resolution

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## Facts

MCGM owned plots of land in Mumbai, which it contracted to lease to SevenHills Healthcare for 30 years to construct a 1500-bed hospital. The contract, dated December 20, 2005, stipulated that 20% of the beds should be reserved for the economically deprived. SevenHills was to complete construction within 60 months, but the project was not completed by the deadline of April 24, 2013. A lease deed was to be executed within a month after completion, but this did not occur. SevenHills defaulted on lease rent payments, leading MCGM to issue a show cause notice on January 23, 2018, proposing termination of the contract. SevenHills owed MCGM ₹76,05,07,780. SevenHills borrowed from banks and financial institutions, creating security by way of mortgage on the land. Axis Bank

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## Issues and analysis

### Issue 1: Whether the NCLT and NCLAT erred in approving the resolution plan that implicated MCGM's assets …

**Ratio:** The principle that if a statute requires a thing to be done in a particular manner, it

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**Reasoning:** The Supreme Court reasoned that the resolution plan, by envisioning the creation of

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**Interpretation:** The court interpreted Section 92 of the MMC Act as a mandatory provision that

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**Application:** The court applied the principle that statutory requirements must be strictly

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## Parties

- **Judges:** S. Ravindr…; Arun Mi…; +1 more
- **Appellants:** MUNICIPAL…
- **Respondents:** SevenHills…; Abhilas…

## Timeline

- **2005-12-20 — Contract Ag…**: MCGM and SevenHills Healthcare (P.) Ltd. entered into a contract for the development of…
- **2013-04-24 — Project De…**: The deadline for the completion of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 62 — Appeal to Supreme Court](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-62)

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