NCLT Quashes MIDC's Cancellation Of Jet Airways' Mahape Plot Allotments Under IBC

Mumbai, July 8, 2026: The National Company Law Tribunal (NCLT) has struck down the Maharashtra Industrial Development Corporation’s (MIDC) decision to cancel the allotment of two plots at Mahape, Navi Mumbai, granted to Jet Airways (India) Ltd., holding that the action was inconsistent with the moratorium applicable during the airline’s liquidation under the Insolvency and Bankruptcy Code (IBC).

The NCLT, in its order passed on Wednesday, held that the MIDC’s termination notices dated September 12, 2025, relating to Plot No. EL-236 and Plot No. OS-12/1 in the TTC Industrial Area, were unenforceable in law because they amounted to “other legal proceedings” prohibited by Section 33(5) of the IBC. The tribunal, therefore, directed MIDC to execute the lease deeds in favour of Jet Airways through its liquidator.

Tribunal Finds Violation Of IBC

“The said allotment cancellation notice(s) deals with the assets of corporate debtor, in which it is vested right to use the same for a period of 95 years from the date of execution of lease agreement against the consideration which has already been paid to the Respondent (MIDC) upfront. The action of the Respondent directly deals with the assets of the Corporate Debtor having the effect of depletion thereof, which were otherwise available as on liquidation commencement date, and the proceeds therefrom were to be used for settlement of claims of the creditors. Accordingly, these cancellation notice(s) deplete the assets of the corporate debtor, which is held by the Liquidator as a fiduciary for the benefit of all the creditors in terms of Section 36(2) of IBC. Hence, we are of considered view that the proceedings initiated by the Respondent by issuance of cancellation notice fall within the scope of ‘other legal proceedings’,” the order reads.

The application was filed by Jet Airways’ liquidator, Satish Kumar Gupta, who contested the MIDC’s cancellation of the allotments and forfeiture of the lease premium. The liquidator contended that the move diminished assets forming part of the liquidation estate and would adversely affect recoveries for creditors.

Leasehold Rights Recognised

The tribunal noted that MIDC had allotted the two plots in 2017 and 2018 for aviation-related training facilities and tree plantation purposes. Jet Airways had already paid the entire lease premium of over Rs 15.86 crore before the corporate insolvency resolution process began, and possession of the plots was handed over in September 2020. Although the lease deeds were never formally signed, the airline continued to remain in possession of the properties.

Rejecting MIDC’s contention that the plots did not form part of the liquidation estate because the land title remained with the corporation, the tribunal held that Jet Airways had acquired substantial long-term leasehold rights for 95 years after paying the full consideration upfront. Those rights, the Bench said, constituted assets of the corporate debtor and could not be excluded from the liquidation estate merely because ownership of the land continued to vest in MIDC.

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Cancellation Notices Quashed

It found that MIDC had not complied with the principles of natural justice, pointing out that no prior notice had been issued before the cancellation letters and that there was no material to show that Jet Airways had authorised any alleged third-party encroachment on the plots.

Concluding that the cancellation notices could not be sustained in law, the NCLT allowed the liquidator’s plea, quashed MIDC’s termination notices, and directed the corporation to promptly execute the lease agreements for both Mahape plots in favour of the corporate debtor.

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