NCLT initiates insolvency proceedings against Mahagun over ₹260 crore debt

The National Company Law Tribunal (NCLT) has officially initiated the Corporate Insolvency Resolution Process (CIRP) against real estate developer Mahagun (India) Private Limited. The decision, pronounced on August 5, 2025, comes after the company failed to repay a significant outstanding debt of over ₹260 crore.

The application to the tribunal was filed by IDBI Trusteeship Services Limited, acting as the debenture trustee for Asia Real Estate II India Opportunity Trust. The debt originates from secured, senior, unlisted, non-convertible debentures that Mahagun had issued in December 2020. The document reveals that IDBI Trusteeship Services had extended a secured debt and facility by subscribing to these debentures, disbursing an amount of ₹355 crore to the corporate debtor. However, Mahagun failed to honor the redemption payment, with the default date recorded as September 30, 2023.

The legal proceedings detailed in the NCLT order show that despite receiving multiple notices from the debenture trustee, Mahagun (India) Private Limited did not make any payments. The outstanding amount, which includes both principal and accrued interest, stood at a staggering ₹2,60,56,55,694 as of January 15, 2025. During the tribunal’s hearings, the corporate debtor’s counsel did not deny the existence of the financial debt but instead raised technical questions regarding the authorization of the debenture trustee’s representative. The tribunal ultimately dismissed these objections, noting the clear existence of the debt and the company’s failure to file a substantive response to the allegations.

With the order, the NCLT has recognized the default and the application has been admitted, effectively placing Mahagun (India) Private Limited under the CIRP as per the Insolvency and Bankruptcy Code. An Interim Resolution Professional will now take control of the company’s affairs to manage the process and explore a resolution plan with the aim of either restructuring the company or liquidating its assets to pay back its creditors. This marks a significant development for the company and its investors, highlighting the strict enforcement of insolvency laws in India.

Also See: ATS Infrabuild to undergo insolvency process for Rs 5-crore default