On April 15, 2025, the Supreme Court of India upheld the National Company Law Tribunal’s (NCLT) decision to initiate insolvency proceedings against Dheeraj and Kapil Wadhawan, former promoters of Dewan Housing Finance Corporation Ltd (DHFL). The Wadhawan brothers, who had provided personal guarantees for DHFL’s loans, faced insolvency proceedings due to a default of ₹3,958 crore, including interest and penalties, owed to Union Bank of India .
The Mumbai bench of the NCLT had earlier admitted Union Bank’s applications under Section 95 of the Insolvency and Bankruptcy Code (IBC) to initiate personal insolvency proceedings against the Wadhawans. Kapil Wadhawan’s case was admitted on April 2, 2024, while Dheeraj Wadhawan’s case was admitted on March 20, 2024 .
The Wadhawans challenged these decisions, arguing that the NCLT had misapplied Section 95 of the IBC. However, the Supreme Court dismissed their appeals, affirming the NCLT’s authority to initiate insolvency proceedings against personal guarantors under this section
This ruling reinforces the accountability of personal guarantors in corporate defaults and underscores the judiciary’s support for creditor rights within India’s insolvency framework.
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