Supreme Court upholds Shree Naman Developers' acquisition of Bengaluru, Pune hotel under NCLT proceedings

The Supreme Court has upheld insolvency proceedings against Gstaad Hotels and Neo Capricorn Plaza, owners and operators of the JW Marriott hotel in Bengaluru and Crowne Plaza hotel in Pune, respectively, while clarifying that disputes over the precise quantum of outstanding debt cannot prevent the initiation of corporate insolvency resolution proceedings (CIRP).

The insolvency process has already resulted in the Mumbai bench of the National Company Law Tribunal (NCLT) approving Shree Naman Developers' combined Rs 1,800 crore resolution plans for the two companies. The plan for Gstaad Hotels is valued at Rs 1,611 crore, while that for Neo Capricorn Plaza is valued at Rs 189 crore.

The combined resolution value exceeds the two companies' admitted liabilities of around Rs 1,227 crore, a relatively rare outcome in insolvency resolutions. The developer has implemented the plan within the stipulated 30-day period and has acquired the properties.


A bench of Justices Dipankar Datta and Augustine George Masih dismissed appeals challenging orders of the National Company Law Appellate Tribunal (NCLAT) and the Mumbai bench of the NCLT, which had admitted insolvency petitions filed by Omkara Asset Reconstruction.

The October 15 judgment laid down that proceedings at the admission stage under Section 7 of the Insolvency and Bankruptcy Code (IBC) require a summary determination based on the preponderance of probabilities and documentary evidence, rather than a detailed reconciliation of every disputed accounting entry.

The court distinguished between the occurrence of default, which it described as a historical event, and the quantum of outstanding debt, which can fluctuate due to interest, charges, adjustments and repayments. Disputes over the amount owed do not negate a default if the statutory threshold for initiating insolvency proceedings is met.

The dispute arose from Rs 600 crore in loan facilities extended by Piramal Finance in December 2017 to the two hotel companies as co-borrowers. The facilities included term loans and a revolving credit facility, alongside separate loans under the government's Emergency Credit Line Guarantee Scheme.

The lenders assigned the facilities to Omkara in December 2022. After recording defaults with National E-Governance Services Ltd, an information utility, Omkara recalled the outstanding facilities in February 2023 and subsequently filed insolvency petitions against both companies.

The hotel operators challenged the proceedings, citing cash-management arrangements, debt-service reserve accounts, disputed interest calculations and the businesses' profitability.

The apex court has rejected these arguments, holding that positive operating earnings did not negate a failure to service debt when due. It also declined to reopen the validity of the debt assignment, which had already attained finality.

The Supreme Court upheld the NCLT's July 2025 orders, as affirmed by the NCLAT in August 2025, and directed that insolvency proceedings against both companies proceed in accordance with law.