Mumbai: The National Company Law Tribunal (NCLT) has declared Kapil Wadhawan, the erstwhile promoter of Dewan Housing Finance Corporation Limited (DHFL) and personal guarantor for the credit facilities extended to DHFL, as bankrupt.
Bankruptcy Trustee Appointed
In its order, the tribunal directed Wadhawan to submit his statement of financial position to the Bankruptcy Trustee, Sanjay Kumar Mishra, who was proposed by the financial creditor, Union Bank of India, and appointed by the tribunal. The NCLT further ordered that the statement of financial position be submitted within the specified period as described in the order copy.
Failure To Submit Repayment Plan
The tribunal observed, “As per the Personal Guarantor (PG) admission order, the Personal Guarantor was required to prepare a repayment plan under Section 105 of the Code, in consultation with the Resolution Professional, containing a proposal to the creditors of the Personal Guarantor for restructuring his debts and affairs. Several attempts were made by the erstwhile RP and the Resolution Professional to seek a repayment plan from the Personal Guarantor. However, no repayment plan was received. Therefore, the creditors, in their meeting held on 20.09.2024, unanimously agreed to seek closure of the insolvency process and initiate the bankruptcy process before this Tribunal.”
Union Bank Filed Petition Against Wadhawan
The case was filed by Union Bank of India against Kapil Wadhawan, who had executed a joint deed of guarantee on June 22, 2019, guaranteeing the obligations of the principal borrower, DHFL. Union Bank, including its amalgamated entities Andhra Bank and Corporation Bank, had extended credit facilities to DHFL through several consortium agreements dating back to 2010.
₹39,000 Crore Default Triggered Proceedings
Following an event of default, the bank issued a guarantee invocation-cum-demand notice to Mr. Wadhawan on September 10, 2020, for over Rs 39,58,30,48,963.71. When he failed to pay, Union Bank filed a petition under Section 95 of the Insolvency and Bankruptcy Code (IBC) in December 2020 to initiate an insolvency resolution process against him.
Insolvency Resolution Process Began In 2024
On April 2, 2024, the NCLT Mumbai Bench admitted the petition and initiated the insolvency resolution process. Mr. Wadhawan challenged this order before the National Company Law Appellate Tribunal (NCLAT), but his appeal was dismissed on August 14, 2024. An appeal against the NCLAT’s decision is currently pending before the Supreme Court.
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Tribunal Confirms Bankruptcy Under IBC
Upon reviewing the petition and supporting documents, the NCLT found the application compliant with Section 123 of the Insolvency and Bankruptcy Code (IBC). Consequently, the tribunal admitted the petition and declared Kapil Wadhawan bankrupt.
