NCLAT quashes insolvency proceedings against Embassy Developments Limited

Bengaluru-based developer financially sound, says in statement

The National Company Law Appellate Tribunal (NCLAT) quashed insolvency proceedings against Bengaluru-based Embassy Developments Limited, the developer said in a statement to the exchanges on Monday.

 

The appellate tribunal set aside an order from the National Company Law Tribunal that had admitted the corporate insolvency resolution process against the company on December 9, 2025, on a plea by Canara Bank that the company was liable as a corporate guarantor for loans issued to Sinnar Thermal.

 

“We welcome the Hon’ble NCLAT’s order, which upholds our position. This was a legacy issue whereby a letter by Indiabulls Real Estate to fund any shortfall in equity for a past affiliate has been misconstrued and misrepresented as a corporate guarantee. We pursued the appeal with full confidence in the strength of our case,” Jitu Virwani, chairman, Embassy Developments Limited, said.

 

 

“We are aware of the pain this issue has caused our shareholders and welcome the relief this brings to the shares of the company. Our business and operating performance has performed strongly throughout this period, reflecting the resilience of our platform and the strength of our underlying fundamentals,” he added.

 

Embassy said that it remained financially sound and continued to operate in the normal course, with no impact on its business operations, projects, or stakeholders. “This is further reflected in the company’s strong operational performance in FY26, during which Embassy Developments recorded pre-sales of approximately ₹4,600 crore, including its highest-ever quarterly bookings in Q4, underscoring sustained demand and execution momentum,” the company said in a statement on Monday.

 

Embassy has guaranteed facilities granted to Sinnar Thermal through a deed of guarantee signed in 2012. Sinnar Thermal had defaulted on the loans and owed the bank ₹372.35 crore, excluding interest and penalties.

 

A consortium comprising Power Finance Corp Ltd, REC Ltd, Life Insurance Corp of India, Bank of India, Axis Bank Ltd, and Punjab National Bank had sanctioned loans in 2010, 2014, and 2016. The account was declared a non-performing asset in 2017 and recall notices were issued. The NCLT had ruled that the company remains liable as a corporate guarantor for loans issued to Sinnar Thermal and had appointed an interim resolution professional, directing it to undertake all responsibilities under the Insolvency and Bankruptcy Code, 2016. Embassy then challenged this order in the NCLAT.