Mumbai NCLT Bars Collector From Recovery Action On Shree Ram Urban Infrastructure Property Amid Insolvency Moratorium

Mumbai: The National Company Law Tribunal (NCLT) in its recent orders have restrained the Collector and District Magistrate of Mumbai City from initiating any recovery proceedings or creating any third-party interests in the assets of Shree Ram Urban Infrastructure Limited(SRUIL)(corporates debtor) , a company currently undergoing the Corporate Insolvency Resolution Process (CIRP).

The tribunal, presided over by Justice V.G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member), was hearing the application filed by Pankaj Ramandas Majithia, the Resolution Professional (RP) appointed in the case of the debt-ridden infrastructure firm.

The application sought for the protection of the corporate debtor’s property from coercive action which arose from a prior Revenue Recovery Certificate issued by MahaRERA.

As per the application filed by Majithia , it challenged the letter dated April 23, 2025, issued by Tanuja Vadnere, Tahsildar, Collector’s Office, demanding payment of Rs 36.13 crore based on a recovery order passed by MahaRERA in 2018 from a property titled Shree Ram Urban Mills Premises, a Lower Parel based property, which was owned by the Corporate Debtor.

The background to this order stems from a complaint filed by a homebuyer, Amit Sanghvi along with few more before the MahaRERA pleading to withdraw them selves from the said project on the ground of alleged failure of Corporate Debtor to complete the project and deliver the booked flat(s). MahaRERA allowed the request of the complainant(s) vide final order dated

16th March, 2018. MahaRERA, via the order dated 6th July 2018, issued a warrant directing the collector to act upon that warrant seizing the a property owned by the Corporate Debtor.

The application further read, “Post the MahaRERA’s orders the collector instead of attaching plot no. 2, issued an attachment letter dated 12th July 2019 by referring to plot no. 9 i.e. Shree Ram Urban Infrastructure Ltd., Shree Ram Urban Mills Premises Near Worli Naka, Lower Parel, which is the assets of the Corporate Debtor, and has no connection to the complaint filed by the homebuyer, Sanghvi.

Majithia in its application argued that the recovery action initiated by the violated the moratorium imposed under Section 14 of the IBC, which commenced with the CIRP initiation on November 6, 2019, following a Section 7 application filed by SREI Equipment Finance Ltd.. The tribunal also noted that the NCLAT had stayed further steps by the Committee of Creditors but had not lifted the moratorium itself, which remains in effect.

Despite informing the Collector’s office and MahaRERA about the alleged error and the ongoing insolvency proceedings , the Collector proceeded to issue the payment demand, prompting the RP to seek relief from the tribunal.

The tribunal in its orders held, “The proceedings initiated by the Collector in terms of the Revenue Recovery Certificate dated 7th September 2018 are barred under law and ex-facie illegal during the subsistence of the moratorium,” thereby quashing the Collector’s demand letter dated April 23, 2025 and further directing to not to initiate any coercive action or create any third-party interest in the property at Lower Parel until the moratorium is lifted.