CASTLE TO QUEUE: How The 2026 IBC Amendment Dethrones Land Authorities In The Insolvency Waterfall

This article is originally published in ET legal world at 2026 Amendment to IBC: Land Authorities Lose Secured Creditor Status, ETLegalWorld.

Few stakeholders in the Indian insolvency ecosystem have fought as tenaciously or as creatively as statutory land authorities. Industrial development authorities, from Noida and Greater Noida (“GNIDA”) to their counterparts across Uttar Pradesh and beyond, have long claimed that statutory charges under land development legislation elevate them to the status of secured creditors in insolvency proceedings, entitling them to priority over banks, financial institutions, and all other creditors. The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (“2026 Amendment”), enacted on April 6, 2026, has now pulled the rug from under their feet by amending the very definition of “security interest” under Section 3(31) and inserting an unambiguous Explanation into Section 53(1)(e)(i) of the Insolvency and Bankruptcy Code, 2016 (“IBC” or “Code”). This