NCLT clears withdrawal of insolvency proceedings against Mahagun

The decision follows the company's settlement with IDBI Trusteeship Services; the NCLT order further records that all pending applications in the matter stand disposed of

In major relief to NCR-based realty firm Mahagun, the National Company Law Tribunal (NCLT) allowed the withdrawal of insolvency proceedings against it after the company reached a settlement with IDBI Trusteeship Services over an alleged default of around Rs 256 crore.

 

“It is submitted that during the pendency of the matter before this adjudicating authority, the parties have entered into a settlement vide settlement agreement dated February 12,” the NCLT bench stated in its order dated February 17.

 

This follows the Financial Creditor (IDBI Trusteeship) filing an application before the NCLT seeking withdrawal of the insolvency petition. “The tribunal has taken the settlement on record and dismissed the company petition as withdrawn,” Mahagun said in a statement.

   

The NCLT order further records that all pending applications in the matter stand disposed of.

 

IDBI Trusteeship had initially filed a Section 7 petition against Mahagun claiming a default of Rs 256.48 crore related to non-convertible debentures (NCDs) issued for its Noida-based Mahagun Manorialle project, which were due for redemption between 2022 and 2025.

 

The realty firm had challenged the maintainability of the IDBI Trusteeship plea and sought time to file a detailed reply. However, in August 2025, the NCLT passed an order admitting an insolvency plea against Mahagun, appointing an interim resolution professional, and suspending the company's board.

 

Amit Jain, director of the suspended board of Mahagun (India), then challenged the order before the National Company Law Appellate Tribunal (NCLAT), which set aside the order.

 

Directing the NCLT to hear the matter afresh, the appellate tribunal also held that the adjudicating authority failed to grant the corporate debtor an adequate opportunity to file a detailed reply before reserving orders.

 

Moreover, the NCLAT noticed intervention applications filed by different sets of homebuyers of other Mahagun projects, who requested that the NCLT order directing insolvency against the realty firm be set aside.

 

Some of them suggested continuing the Corporate Insolvency Resolution Process (CIRP) against Mahagun, while another group argued it should be confined only to the Mahagun Manorialle project.

 

With NCLT now allowing withdrawal of CIRP, people in the know told Business Standard that the development is expected to provide clarity and stability for the ongoing Mahagun Manorialle project, located at Jaypee Wish Town, Sector 128, Noida. 

 

“The company has outlined a focused execution roadmap and is targeting completion and delivery in a phased manner, with construction activities being accelerated,” Mahagun stated.

 

Mahagun has reiterated its commitment to adhering to the agreed settlement obligations and ensuring sustained progress on construction, with the creditor (IDBI Trusteeship) reserving its rights in accordance with law in the event of any non-adherence to settlement terms.