The National Company Law Tribunal (NCLT) has admitted Kotak Mahindra Bank's insolvency petition against Unity Realty and Developers over a claimed default of ₹68.49 crore. According to reports from The Economic Times, the Mumbai bench of the tribunal admitted the petition filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) on February 25, with the order pronounced on September 22. The financial creditor had claimed the amount in default as of August 31, 2025, with September 23, 2023 stated as the date of default.
Unity Realty and Developers serves as a corporate guarantor for financial facilities availed by Unity Infraprojects, whose account had been classified as a non-performing asset on June 30, 2015. As reported by The Economic Times, the dispute relates to financial facilities originally sanctioned by ING Vysya Bank in 2008. Following financial difficulties faced by the principal borrower, a corporate debt restructuring package was approved in 2014 and restructured facilities aggregating to ₹31.78 crore were sanctioned in February 2015. Unity Realty and Developers had executed a corporate guarantee in relation to these facilities, with the guarantee being invoked by the bank in October 2019.
The Debt Recovery Tribunal (DRT), Delhi, subsequently directed the defendants, including Unity Realty and Developers, to jointly and severally pay ₹39.45 crore, along with interest at 11% per annum. According to The Economic Times, a recovery certificate issued in August 2023 quantified the liability at ₹55.94 crore, besides further interest and costs. Unity Realty and Developers had opposed the insolvency petition, arguing that the petition was barred by limitation since the guarantee had been invoked in 2019 and questioning Kotak Mahindra Bank's right to initiate proceedings independently of the security trustee. The defendants also raised objections concerning the restructuring documents and release of facilities.
The NCLT rejected these objections, noting that the DRT's judgment and recovery certificate had not been challenged, stayed, modified or set aside. As reported by The Economic Times, the tribunal held that the DRT judgment and recovery certificate provided a fresh cause of action and that the insolvency application filed in February this year was within the limitation period. The NCLT also held that Unity Realty and Developers' liability as a corporate guarantor could be proceeded against under Section 7 of the IBC, stating that the financial creditor had established the existence of financial debt and default and that the petition satisfied the requirements of the IBC. The tribunal's ruling establishes important precedent for corporate guarantee enforcement under the IBC framework.
