Mumbai: NCLT Rejects Withdrawal Of Dharan Infra-EPC Insolvency Proceedings Despite ₹10 Crore Tata Capital Settlement

Mumbai, October 20, 2026: The National Company Law Tribunal (NCLT), Mumbai, has rejected a plea to withdraw insolvency proceedings against Dharan Infra-EPC Limited, holding that a settlement with one lender cannot be the sole basis for ending the corporate insolvency resolution process (CIRP) when substantial claims by other creditors remain unresolved.

The tribunal dismissed applications filed by the interim resolution professional (IRP) and the company’s suspended director seeking withdrawal of the insolvency proceedings, noting that dues to six other financial creditors, including LIC Housing Finance, Capri Global Capital and Canara Bank, remained unsettled.

Tribunal Cites Interests Of All Creditors

In its order, the tribunal observed: “Permitting withdrawal of the CIRP at this stage may necessitate the revival or fresh filing of multiple proceedings, thereby leading to multiplicity of litigation and further delay, which would not serve the interests of either the creditors or the Corporate Debtor.”

The order further stated that, following the admission order dated December 12, 2025, in C.P. No. 729 of 2025, other petitions filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) had been dismissed, with directions to the concerned creditors to submit their claims before the IRP.

The tribunal noted that allowing the withdrawal of the CIRP could force other creditors to revive or file separate proceedings, leading to multiple litigations and further delays. It emphasised that the collective framework of the Code is intended to facilitate resolution in the interests of all creditors, rather than permit individual enforcement or settlement to the exclusion of other creditors.

The order also clarified that any questions concerning the limitation period for enforcing claims would be considered by the IRP and the Committee of Creditors (CoC), as applicable, during the verification and consideration of claims.

Tata Capital Settled Claim For ₹10 Crore

The insolvency process was initiated in December 2025 following a petition by Tata Capital Housing Finance Limited, which alleged a default of ₹28.04 crore by Dharan Infra-EPC. The lender subsequently reached a full and final settlement with the company’s suspended director and received ₹10 crore. It also submitted the prescribed withdrawal form to the IRP.

The other creditors contended that they had submitted their claims to the IRP but that these had not been adequately addressed. They also pointed out that the IRP had informed the National Company Law Appellate Tribunal (NCLAT) in July 2026 that claims amounting to approximately ₹600 crore had been received.

The creditors sought verification of their claims and continuation of the insolvency process.

Other Creditors Have Substantial Claims

The tribunal observed that the ₹10 crore settlement covered only Tata Capital’s claim, while other creditors had raised substantial demands, including one claim of approximately ₹183 crore.

There was no material on record to establish that the other creditors’ claims had also been settled or that any such settlement had been proposed.

The bench held that a settlement with one financial creditor, in the face of substantial outstanding liabilities to others, did not by itself establish the company’s ability to resolve its overall financial distress.

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It further noted that permitting withdrawal could compel other creditors to revive or initiate separate proceedings, resulting in multiple litigations and further delays.

The IBC’s collective framework is intended to facilitate resolution in the interests of all creditors, rather than allow individual settlements to exclude other stakeholders.

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