Madhya Pradesh HC Stays Arrest In Recovery Case Arising From RERA Order Against Insolvency-Bound Developer

The Madhya Pradesh High Court at Jabalpur has recently stayed the execution of an arrest warrant in recovery proceedings arising from a RERA order against a real estate developer undergoing insolvency, noting that enforcing civil jail despite a subsisting moratorium would cause serious prejudice.

A bench of Justice Sanjeev S. Kalgaonkar observed, “The petitioner would be seriously prejudice, if the order regarding civil jail is executed in furtherance of the warrant of arrest despite there being moratorium stay order passed by the NCLT, Special Indore Bench in his favour. Therefore, it is directed that the execution in furtherance of order dated 09.04.2026 passed by the Sub-Divisional Officer, Kolar is stayed till next date of hearing,”

The petition by Jaideep Singh challenged orders dated March 18, 2026 and April 9, 2026 passed by the Sub-Divisional Officer (Revenue), Kolar, Bhopal, directing recovery proceedings and issuance of a warrant of arrest against Singh in execution of the recovery certificate.

Singh contended that despite a moratorium being in force pursuant to insolvency proceedings before the National Company Law Tribunal, the authorities proceeded with coercive recovery action.The moratorium was imposed in the corporate insolvency resolution process of Global Mega Ventures Pvt. Ltd., a real estate developer of the GMV Olaan project in Bhopal.

The insolvency proceedings were set in motion by a group of homebuyers led by S.K. Dutta, along with other allottees who had paid significant sums for flats but were still waiting for possession.

On July 28, 2025, the tribunal admitted the case against the company and put a moratorium in place under the Insolvency and Bankruptcy Code.

With that, ongoing proceedings and the execution of any judgment or order against the corporate debtor were put on hold.

Before the High Court, Jaideep Singh pointed out that the authorities were not only aware of this moratorium but had also been part of the insolvency proceedings. Despite that, they went ahead with recovery steps and even sought to have him arrested.

He further pointed out that his representation dated April 6, 2026 highlighting the moratorium was not considered, and that the order directing civil imprisonment was passed without cogent reasons.

On the other hand, the State argued that the recovery proceedings were initiated to enforce orders passed in favour of flat buyers under the real estate regulatory framework and were being carried out in accordance with the Madhya Pradesh Land Revenue Code and Rules.

After hearing the parties, the High Court said the impact of the insolvency proceedings and the moratorium order would be examined after hearing both sides.

“The effect of IBC proceeding and the order of NCLT will be considered after hearing both the parties,” the Court said.

For now, the Court has stayed the execution of the April 9, 2026 order passed by the Sub-Divisional Officer, Kolar, which had directed Singh's arrest.