Supreme Court Continues Symbolic Possession Of Tower-5 By RP In Morpheus Bluebell CIRP

The Supreme Court of India has directed that the interim arrangement permitting only symbolic possession of Tower-5 by the Resolution Professional of the Morpheus Bluebell project developed by Morpheus Prodevelopers Pvt Ltd shall continue.

The company is undergoing the Corporate Insolvency Resolution Process (CIRP) in the Morpheus Bluebell project. The Court was hearing an appeal filed by SGN Universal Construction Company Private Limited against the National Company Law Appellate Tribunal's March 30, 2026 ruling.

A Bench of Justices K. V. Viswanathan and Vipul M. Pancholi observed that the matter requires further examination. It ordered that “the said order of the NCLAT shall continue till further orders.”

The dispute centers on whether Tower-5 and the land beneath it form part of the assets of Morpheus Prodevelopers Pvt Ltd, the corporate debtor. SGN Universal, on the other hand, claims independent development rights over the tower.

The controversy began with an insolvency plea filed in February 2024 by homebuyers of Towers 3 and 4. The National Company Law Tribunal's New Delhi bench admitted CIRP on November 19, 2024. While doing so, it included units in Tower-5 for the purpose of assessing the statutory threshold. It also made observations regarding the tower's status.

On appeal, the NCLAT examined these observations. It held that Towers 3, 4, and 5 form part of a single integrated real estate project with common infrastructure. The tribunal also held that development rights fall within the definition of “property.”

Such rights can constitute assets of the corporate debtor under the Insolvency and Bankruptcy Code. It noted the overriding effect of the Code and the moratorium on arbitration proceedings.

At the same time, the NCLAT clarified that ownership of Tower-5 has not been finally decided. It continued an interim arrangement restricting the Resolution Professional from taking physical possession. Only symbolic possession was permitted, pending determination of rights.

The tribunal also noted that interim protection granted by the Delhi High Court and orders of the arbitral tribunal would not prevail over the insolvency process after CIRP admission. This is because of the statutory moratorium under the Code. The moratorium led to a halt of arbitration proceedings, which were subsequently terminated.

In this backdrop, the Supreme Court has continued the same interim arrangement. The Resolution Professional will remain limited to symbolic possession of Tower-5. The question of whether it forms part of the CIRP estate remains to be decided.

The matter is scheduled to be heard on July 21.