Kapil Wadhawan Moves NCLAT To Challenge Insolvency Proceedings Against Him

Kapil Wadhawan Moves NCLAT To Challenge Insolvency Proceedings Against Him

Kapil Wadhawan, the former promoter of Dewan Housing Finance (DHFL), has filed an appeal with the National Company Law Appellate Tribunal (NCLAT) challenging the NCLT's decision to start personal insolvency proceedings against him. The NCLT's Mumbai bench had issued this order on April 2 following a plea from Union Bank.

The appeal was heard by a two-member bench of the NCLAT and has been adjourned until July 18 for further proceedings.

Additionally, the NCLT had earlier appointed Devendra Mehta as the Resolution Professional (RP) to manage the claims of creditors and assess Wadhawan's personal assets. Wadhawan had acted as a guarantor for DHFL's loans, which included term loans exceeding ₹ 4,000 crore and working capital facilities of ₹ 450 crore.

The NCLT had previously initiated insolvency proceedings against DHFL in November 2019 due to defaults on these loans.

Following that, Piramal Capital acquired the financially strained firm for ₹ 34,250 crore and subsequently merged it into its own operations.

At the time the plan was approved, creditors of DHFL had recovered a total of ₹ 38,000 crore through the resolution process.

Under the Insolvency and Bankruptcy Code, personal guarantors can be directly subjected to insolvency proceedings.

In April of this year, the NCLT had ordered the initiation of insolvency proceedings against media mogul Subhash Chandra following a petition from Indiabulls Housing Finance.