NCLT Delhi Admits Insolvency Pleas Against RAB Group Subsidiaries; Hypothecators Held Liable as Corporate Guarantors

April 7, 2026 : The New Delhi Bench (Court-II) of the National Company Law Tribunal (NCLT) has admitted four insolvency petitions filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by J.C. Flowers Asset Reconstruction Pvt. Ltd. against subsidiaries of RAB Enterprises (India) Pvt. Ltd., a group promoted by Rana Kapoor and Bindu Kapoor.

The petitions, bearing C.P.(IB) Nos. 30, 31, 32 and 36 of 2026, were decided through a common order dated April 7, 2026 by a Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri. The corporate debtors include Imagine Habitat Pvt. Ltd., Imagine Residence Pvt. Ltd., Imagine Home Pvt. Ltd., and Imagine Estate Pvt. Ltd., all wholly owned subsidiaries of RAB Enterprises.

The dispute traces back to loan facilities extended in 2018 and 2019 by Samman Capital Limited (formerly Indiabulls Housing Finance Ltd.) and its subsidiary Indiabulls Commercial Credit Ltd. to Bliss House Pvt. Ltd., the principal borrower. Loans amounting to ₹70 crore and ₹105 crore were sanctioned under separate agreements. To secure these facilities, personal guarantees were furnished by Rana Kapoor and Bindu Kapoor, and a Deed of Hypothecation dated March 22, 2019 was executed by several group entities, including the present corporate debtors, hypothecating receivables from certain immovable properties in favour of the lender.

The loan documents defined “obligors” broadly to include borrowers, guarantors, hypothecators and other security providers, making them jointly and severally liable for repayment. In March 2020, following criminal investigations against the personal guarantors, the lender invoked clauses relating to “material adverse effect” and issued recall notices demanding repayment within a short period. When the dues remained unpaid, arbitration proceedings were initiated, culminating in an arbitral award dated February 28, 2023, which crystallised the liability of the borrower and its obligors at approximately ₹196.87 crore along with interest. The award is presently under challenge before the Delhi High Court.

Subsequently, through an assignment agreement dated March 29, 2025, the debt was assigned to J.C. Flowers Asset Reconstruction Pvt. Ltd., which stepped into the shoes of the original lender and issued demand notices in September 2025 seeking repayment of over ₹260 crore. Upon failure of the corporate debtors to discharge the liability, insolvency proceedings were initiated.

Before the Tribunal, the respondent companies argued that execution of a Deed of Hypothecation did not render them financial debtors or corporate guarantors. They also contended that there was no default at the time of recall, that the Tribunal lacked jurisdiction, and that the petitions were not maintainable in light of the pending challenge to the arbitral award.

The NCLT rejected these contentions, holding that the contractual framework clearly brought hypothecators within the ambit of “obligors” and imposed enforceable repayment obligations upon them. The Tribunal observed that the corporate debtors had effectively undertaken to ensure repayment of the principal borrower’s dues, thereby assuming the position of sureties or corporate guarantors. It further held that the existence of financial debt and default stood established through the loan documents, recall notices and arbitral award, and that the pendency of Section 34 proceedings does not bar initiation of CIRP under the IBC.

Accordingly, the Tribunal admitted the petitions and initiated the Corporate Insolvency Resolution Process (CIRP) against all four corporate debtors. A moratorium under Section 14 of the Code has come into force, prohibiting institution or continuation of proceedings and restricting transfer of assets of the corporate debtors.

The ruling underscores that entities providing security through hypothecation can be treated as corporate guarantors where the contractual terms impose joint and several liability, thereby widening the scope of accountability under the IBC framework.