NCLAT Sets Aside Separate CIRP Against Earth Towne After Supreme Court Restored EIL's Resolution Plan

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has set aside insolvency proceedings against Earth Towne Infrastructure Pvt. Ltd. (ETIPL), holding that a separate Corporate Insolvency Resolution Process (CIRP) could not continue after the Supreme Court restored the resolution plan for Earth Infrastructures Ltd. (EIL) and brought ETIPL's land within that plan.

A bench of Judicial Member Justice Mohammad Faiz Alam Khan and Technical Member Naresh Salecha held that, as on June 1, 2026, there was no separate default of ETIPL, distinct from the claims resolved under the restored plan, that could support a fresh CIRP.

The tribunal observed, “A separate CIRP against ETIPL, founded entirely on its status as a distinct legal person, would resurrect the very separateness that the Hon'ble Supreme Court has disregarded, and would do so for the purpose of subjecting the same land to a different resolution. That would run directly counter to the ratio and the directions of the Hon'ble Supreme Court Judgment.”

The case concerns the Earth Towne residential project in Greater Noida. The project land was leased by the Greater Noida Industrial Development Authority (GNIDA) to ETIPL, which was incorporated as a special purpose company by a consortium including EIL. EIL later acquired 98% of ETIPL and was given exclusive development rights over the land.

CIRP against EIL began in 2018. A resolution plan submitted by Roma Unicon Designex Consortium for Earth Towne was approved by the National Company Law Tribunal (NCLT) in 2021.

After NCLAT subsequently set aside the approval, the Supreme Court restored the plan on May 5, 2026, in Alpha Corp Development Private Limited v. Greater Noida Industrial Development Authority & Ors.

The Supreme Court lifted the corporate veil between EIL and its land-holding subsidiaries, including ETIPL, holding that EIL was the main driving force behind the projects and the subsidiaries were “only a front”. It restored Roma's plan and directed that the timelines for completing the projects begin from June 1, 2026.

On the same day, the NCLT admitted a Section 7 petition against ETIPL filed by Earth Towne homebuyers.

NCLAT held that the Supreme Court judgment had already brought ETIPL's leasehold land within Roma's resolution plan. The homebuyers' claims arising from their Earth Towne allotments were covered by that plan.

The tribunal held that no separate debt of ETIPL remained due and payable to the homebuyers on June 1, 2026, independent of the restored plan. Their remedy, it held, was to enforce the restored plan rather than initiate a fresh CIRP against ETIPL.

NCLAT also held that insolvency resolution of a single real estate project involving a landowner and developer should proceed on a consolidated basis.

“We are of the opinion that the application would lie against the landowner and developer jointly and not individually against one or the other,” the tribunal held. A separate CIRP against ETIPL would “not consolidate but fragment the resolution of Earth Towne”.

The tribunal accordingly set aside the NCLT order admitting ETIPL's CIRP. It directed the parties to appear before the NCLT on October 15, 2026, for further action in accordance with law. There was no order as to costs.