Union Bank of India Vs Kapil Wadhawan (NCLT Mumbai)
NCLT Mumbai held that application u/s. 123 of the Insolvency and Bankruptcy Code for initiation of Bankruptcy Process against Personal Guarantor admitted as all the requirements of section 123 complied. Accordingly, Kapil Wadhawan [personal guarantor of DHFL] is declared Bankrupt.
Facts- This Petition has been filed by Union Bank of India (‘Petitioner/ Financial Creditor’) under Section 123 of the Insolvency and Bankruptcy Code, 2016 read with Rule 7 of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Bankruptcy Process for Personal Guarantors to Corporate Debtors) Rules, 2019 seeking to initiate Bankruptcy Process against the Respondent (Personal Guarantor) who had executed personal guarantee for the credit facilities extended to Dewan Housing Finance Corporation Limited (‘DHFL/ Principal Borrower’).
Conclusion- As per Section 115(2) of the Code where the Adjudicating Authority rejects the repayment plan under Section 114, the creditors shall be entitled to file an application for bankruptcy under Chapter IV. As per section 121(2) of the Code, an application for bankruptcy shall be filed within a period of three months from the date of order passed by the Adjudicating Authority under Section 115(2) of the Code. We note that the Adjudicating Authority had passed the order under Section 114 of the Code on 02.01.2025 and the present application was filed on 29.03.2025 which is within limitation.
