In Brief
NOIDA leased land to a developer for construction of residential flats on 90-year lease terms with Rs. 46 crore premium payable over time. When the developer faced insolvency, NOIDA claimed financial creditor status under the Insolvency and Bankruptcy Code. The Supreme Court held that the lease is not a finance lease under accounting standards because while risks transferred to the lessee, rewards (ownership incidents) did not: the lessor retained control, cancelled rights, mortgage restrictions, and could reclaim possession. The Court rejected arguments that the staggered payment structure constitutes a financial debt. NOIDA was confirmed as an operational creditor entitled to statutory dues, but denied financial creditor status with its consequent voting rights in creditor committee proceedings.",
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