The National Company Law Tribunal (NCLT) recently declared former Dewan Housing Finance Corporation Ltd (DHFL) promoter Kapil Wadhawan bankrupt [Union Bank of India v Kapil Wadhawan].
The tribunal passed the order after he failed to repay over ₹4,545 crore dues under a personal guarantee to a consortium of lenders led by Union Bank of India.
In an order passed on August 14, a coram of NCLT comprising Lakshmi Gurung (Judicial Member) and Hariharan Neelakanta Iyer (Technical Member) also appointed Sanjay Kumar Mishra as the bankruptcy trustee.
As per the order, Wadhawan's estate “shall vest in the bankruptcy trustee immediately” for the benefit of creditors.
The proceedings arose from a personal guarantee signed by Wadhawan on June 22, 2019, for credit facilities extended to DHFL by a consortium of banks including Union Bank of India.
Through this joint guarantee deed, Wadhawan had personally guaranteed repayment of DHFL’s obligations up to ₹50,656.84 crore.
However, after the Reserve Bank of India initiated insolvency proceedings against DHFL in December 2019, Union Bank of India submitted a claim of ₹36,45.56 crore. Of this amount, ₹35,17.30 crore was admitted by the administrator of DHFL.
When DHFL's approved resolution plan (submitted by Piramal Capital & Housing Finance) led to partial recovery, Wadhawan's liability as a guarantor was calculated at ₹4,545.96 crore as of March 2025.
Initially, the guarantee was invoked in September 2020 and a demand notice was served in October 2020. However, Wadhawan failed to make any payments. Subsequently, Union Bank filed an insolvency application under Section 95 of the Code in December 2020.
That petition was admitted by NCLT on April 2, 2024 and Wadhawan was directed to submit a repayment plan in consultation with the resolution professional.
However, despite several follow-ups by both the previous and current resolution professionals, Wadhawan did not submit any plan.
Thereafter, in a creditors' meeting held on September 20, 2024, lenders unanimously resolved close the insolvency proceedings and initiate bankruptcy proceedings.
The present bankruptcy petition was filed on March 29, 2025.
After examining the documents, the tribunal deemed it fit to declare Wadhawan bankrupt.
"We are satisfied that the Petition complies with all the requirements as prescribed in section 123 of the Code. Therefore, we consider it proper to admit this Petition and pass following orders,” the NCLT said in its order.
The court further directed that Wadhawan’s assets be vested in the Bankruptcy Trustee for distribution among creditors. It also restrained any creditor from initiating or continuing legal proceeding against the bankrupt's estate without prior approval of the tribunal.
The bankruptcy order will remain in effect until Wadhawan is formally discharged under Section 138 of the Code.
A team from Cyril Amarchand Mangaldas comprising of advocates Animesh Bisht (Partner) Aniruddh Gambhir (Principal Associate) and Pushkar Deo (Associate) appeared for Union Bank of India.
The matter was led under the guidance and supervision of Senior Partner L Viswanathan.
[Read Order]