The HC upheld SRA's termination of petitioner's appointment as ...

Slum Rehabilitation Authority's Developer Termination Upheld Despite Insolvency Protection Under Section 238

March 26, 2025

Case Laws     IBC     HC

The HC upheld SRA's termination of petitioner's appointment as developer of a slum rehabilitation project due to failure to pay transit rent arrears and complete the project within stipulated time. While IBC provisions generally have overriding effect under Section 238, the court determined that Slum Act's mandate for timely rehabilitation is not inconsistent with IBC objectives but furthers them. The obligation to pay transit rent was deemed a statutory duty, not merely contractual. The court found SRA's invocation of Section 13(2) lawful and justified, though noted a procedural deficiency in not granting the revived petitioner a final opportunity to clear dues. The resolution plan under IBC does not override obligations under the Slum Act except for financial claims arising before insolvency commencement.

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