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Informist, Tuesday, Apr. 15, 2025

 

--SC upholds personal IBC case against Dewan Housing's 2 former promoters

--CONTEXT: NCLT admitted Union Bk IBC pleas vs Dewan Housing former promoters

 

NEW DELHI – The Supreme Court on Tuesday upheld insolvency proceedings against Dewan Housing Finance Corp.'s former promoters Dheeraj Wadhawan and Kapil Wadhawan as personal guarantors to the loan given by Union Bank of India.

 

An insolvency application against the company was first filed by the Reserve Bank of India with the National Company Law Tribunal in 2019, which was admitted in the same year. In Dewan Housing's insolvency, Union Bank of India filed claims of INR 36.46 billion, out of which INR 35.17 billion was admitted by the administrator of the debt-ridden company. Thereafter, the Mumbai bench of the NCLT had admitted petitions to start insolvency proceedings against Wadhawans for default of INR 39.58 billion each in 2024.

 

Wadhawans were the personal guarantors to some of the loan facilities provided by Union Bank of India to Dewan Housing Finance. In 2020, Union Bank of India invoked the joint deed of guarantee and called upon Wadhawans to pay the unpaid amount. On failure to pay the amount, Union Bank of India moved the Mumbai tribunal, which admitted its petitions to start insolvency proceedings against Wadhawans. The Mumbai tribunal's order was also upheld by the National Company Law Appellate Tribunal.

 

In its appeal to the Supreme Court, Wadhawans said that the appellate tribunal has committed an error by holding that it can't be allowed to agitate the "issue of locus" of Union Bank of India to maintain insolvency petition when this plea was allegedly available to it at the time of the first round of litigation, but not raised. The appellate tribunal failed to consider that a plea of maintainability could not have been taken during the first round of proceedings, on account of Union Bank of India's suppression of the security trustee agreements.

 

On Tuesday, shares of Union Bank of India ended almost 4% higher at INR 122.40 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Ashish Shirke

 

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