NCLT Mumbai Declares Former DHFL Chairman Kapil Wadhawan Bankrupt Over ₹4546 Crore Debt; Appoints Bankruptcy Trustee
Pranav B Prem
The National Company Law Tribunal (NCLT), Mumbai Bench–Court III, has declared Kapil Wadhawan, former Chairman and Managing Director of Dewan Housing Finance Corporation Ltd. (DHFL), as bankrupt over a debt exceeding ₹4545 crore. The order was passed on August 14, 2025, by a Bench comprising Judicial Member Ms. Lakshmi Gurung and Technical Member Shri Hariharan Neelakanta Iyer, on a petition filed by the Union Bank of India under Section 123 of the Insolvency and Bankruptcy Code, 2016.
Background of the Case
Union Bank of India, along with other consortium lenders including Andhra Bank and Corporation Bank (later merged with Union Bank), had extended various credit facilities to DHFL. To secure the repayment, Kapil Wadhawan, along with another guarantor, executed a Joint Deed of Guarantee dated June 22, 2019, in favour of the consortium, guaranteeing repayment of amounts not exceeding ₹50,656.84 crore.
Subsequently, in December 2019, the NCLT admitted DHFL into Corporate Insolvency Resolution Proceedings (CIRP) on a petition filed by the Reserve Bank of India under Section 7 of the Code. Following the initiation of CIRP, Union Bank submitted its claim for over ₹36,000 crore, of which ₹35,173 crore was admitted by the Administrator.
Default and Invocation of Guarantee
When DHFL defaulted under the facility agreements, Union Bank issued Guarantee Invocation Notices in September 2020, demanding payment of approximately ₹3958 crore from Wadhawan as the personal guarantor. Upon his failure to pay, a Demand Notice in Form B was served in October 2020.
As the default continued, the Bank filed a petition under Section 95 of the Code seeking initiation of insolvency resolution proceedings against Wadhawan as the personal guarantor. NCLT, Mumbai Bench–I, admitted the petition in April 2024, thereby initiating insolvency resolution against him under Section 100 of the Code. Wadhawan challenged the order before the NCLAT, but the appeal was dismissed in August 2024. He then preferred an appeal before the Supreme Court, where the matter is still pending without any interim relief.
Failure to Submit Repayment Plan
After the admission of the petition, Wadhawan was required to submit a repayment plan in consultation with the Resolution Professional. However, despite several opportunities, no repayment plan was submitted. The creditors, in their meeting held in September 2024, unanimously resolved to close the insolvency resolution process and initiate bankruptcy proceedings. In January 2025, the NCLT recorded that Wadhawan had failed to submit a repayment plan and noted that “non-receipt of repayment plan would tantamount to rejection of plan in terms of Section 114 of the Code.” The Tribunal also clarified in a subsequent order that though he was earlier described as “not traceable,” Wadhawan was, in fact, in judicial custody at Tihar Jail.
Declaration of Bankruptcy
In the present petition under Section 123 of the Code, Union Bank of India sought to initiate bankruptcy proceedings against Wadhawan. After adjusting amounts already recovered from the DHFL resolution process, the Tribunal held that the outstanding debt due and payable stood at ₹4545.96 crore. The NCLT found that the petition was complete in all respects and accordingly declared Kapil Wadhawan as bankrupt. The Bench also appointed Mr. Sanjay Kumar Mishra (IBBI Reg. No. IBBI/IPA-001/IP-P01047/2017-18/11730) as the Bankruptcy Trustee.
The order directed that Wadhawan’s estate would vest in the Bankruptcy Trustee and be distributed among his creditors. It further mandated that Wadhawan must file a statement of his financial position within seven days and that public notice be issued inviting claims from creditors. The Bankruptcy Trustee was also instructed to submit a preliminary report within 90 days and progress reports every quarter.
By its order dated August 14, 2025, the NCLT admitted Union Bank’s petition and declared Kapil Wadhawan bankrupt over a debt of ₹4545.96 crore. The Tribunal appointed a Bankruptcy Trustee to take charge of his estate and administer the bankruptcy process in accordance with the Insolvency and Bankruptcy Code.
Appearance
For the Petitioner: Adv. Pushkar Deo, Adv. Aniruth Purusothaman i/b. Cyril Amarchand Mangaldas
Cause Title: Union Bank of India V. Mr. Kapil Wadhawan
Case No: C.P. No. (IB) 755/MB/C-III/2025
Coram: Hon’ble Ms. Lakshmi Gurung [Member (Judicial)], Hon’ble Shri. Hariharan Neelakanta Iyer [Member (Technical)]
