The Insolvency and Bankruptcy Code (Amendment) Act, 2026, reported to have come into effect from 26 May 2026, is understood to have inserted a provision barring a claimant from asserting secured creditor status in a corporate insolvency resolution process where that claim rests on a statutory charge created by operation of law, as distinct from a security interest created by a contractual agreement between the corporate debtor and the creditor.
The National Company Law Appellate Tribunal is reported to have applied this provision in the Shubhkamna Buildtech matter, where the Noida and Greater Noida industrial development authorities had sought to be treated as secured creditors in the insolvency of a real estate developer, relying on a statutory charge over the developer's leasehold land arising under the relevant industrial development legislation rather than under any specific mortgage or charge document executed with the corporate debtor. The NCLAT is reported to have dismissed the authorities' appeals, holding that a statutory charge of this kind does not, after the 2026 amendment, qualify its holder for secured creditor status in the resolution process.
Commentary on the ruling has noted its practical significance for homebuyers in the underlying project, since treating the development authorities as secured creditors ahead of homebuyers and other creditors was reported to have the potential to impose an additional liability estimated at around Rs. 116 crore on the insolvency estate, a cost that the ruling is reported to have avoided passing on to homebuyer claimants.