The Delhi High Court has refused to entertain a commercial suit filed by Roseland Buildtech Pvt. Ltd., holding that the dispute squarely falls within the domain of the insolvency law framework. The court ruled that once insolvency proceedings are invoked, civil courts cannot step in to decide issues that the insolvency tribunal is empowered to examine.
The decision was delivered by Justice Purushaindra Kumar Kaurav on January 5, 2026, while dealing with competing applications filed by the parties.
Background of the Case
Roseland Buildtech approached the High Court after Vihaan 43 Realty Pvt. Ltd. initiated insolvency proceedings against it under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) before the National Company Law Tribunal.
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The company claimed that a ₹80 crore loan taken in 2006 from Sonata Investments Ltd. had already been fully repaid. It also challenged a Business Transfer Agreement through which the debt was later assigned to Vihaan 43 Realty, calling the document fraudulent, forged, and void from the outset.
On these grounds, Roseland sought declarations from the High Court that no legally enforceable debt existed and that the insolvency petition itself was invalid.
What the Defendants Argued
Senior counsel for Vihaan 43 Realty argued that the suit was a calculated attempt to derail the insolvency process. According to them, the IBC is a self-contained code and gives exclusive jurisdiction to the NCLT to examine questions relating to debt, default, and even allegations of fraud connected to insolvency proceedings.
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They contended that allowing a civil suit to continue would amount to forum shopping and defeat the objective of time-bound insolvency resolution.
Court’s Observations
The High Court closely examined the structure and purpose of the IBC. It noted that Parliament intentionally created a specialised mechanism to deal with insolvency matters, vesting wide powers in the NCLT.
“The Code was enacted to avoid fragmented adjudication across multiple forums,” the bench observed, adding that Sections 63 and 231 of the IBC clearly bar civil courts from entertaining matters that the NCLT is authorised to decide.
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Justice Kaurav rejected the argument that civil courts could step in merely because allegations of fraud or forgery were raised. The court pointed out that the IBC itself equips the NCLT with powers under Sections 65 and 75 to examine fraudulent or malicious initiation of insolvency proceedings.
“The tribunal is not a helpless bystander,” the court remarked, noting that insolvency authorities can look into disputed facts, false information, and abuse of process where required.
Why the Civil Suit Was Not Maintainable
The judge emphasised that Roseland’s core grievance - whether any debt survived and whether the assignment of debt was valid - directly overlaps with the issues pending before the NCLT.
Since the insolvency tribunal has jurisdiction to decide these questions, the High Court held that the civil suit was barred by law. Entertaining it would undermine the unified insolvency framework envisaged by the IBC.
Final Decision
Allowing the application filed by Vihaan 43 Realty under Order VII Rule 11 of the Civil Procedure Code, the High Court rejected Roseland Buildtech’s suit at the threshold. As a result, the interim relief application filed by Roseland also became infructuous.
The court made it clear that Roseland is free to raise all its objections, including allegations of fraud and absence of debt, before the appropriate insolvency forum.
Case Title: Roseland Buildtech Pvt. Ltd. v. Vihaan 43 Realty Pvt. Ltd. & Ors.
Case Number: C.S. (Comm.) 812/2025
