Settlement Brings Relief to Realty Firm Mahagun
The National Company Law Appellate Tribunal has directed the withdrawal of insolvency proceedings against real estate firm Mahagun (India) after the company reached a settlement with its financial creditor.A two member bench of the appellate tribunal took note of a settlement agreement dated February 12, 2026, between Mahagun and IDBI Trusteeship Services. Following this agreement, the financial creditor moved an application seeking withdrawal of the insolvency case.
In its order, the tribunal recorded that during the pendency of the matter, both parties had entered into a settlement. The applicant financial creditor sought permission to withdraw application IB 112 ND 2025.
Insolvency Petition Dismissed as Withdrawn
Accepting the submission, the NCLAT dismissed the insolvency petition as withdrawn. The two page order passed on February 17, 2026, stated that in view of the settlement, all pending applications stand disposed of.However, in its withdrawal plea, IDBI Trusteeship Services also sought liberty to restore or revive the insolvency petition if Mahagun fails to adhere to the terms of the settlement agreement.
Background: CIRP Initiated Over ₹256.48 Crore Default
Mahagun had earlier been admitted into the Corporate Insolvency Resolution Process by the National Company Law Tribunal following an application filed by IDBI Trusteeship.The NCLT had admitted the plea citing a default of ₹256.48 crore linked to non payment of non convertible debentures issued for the company’s Noida based Mahagun Manorialle project.
Earlier Insolvency Proceedings Set Aside
In November last year, the NCLAT had set aside another insolvency proceeding initiated against Mahagun. The appellate tribunal had directed the NCLT to hear the petition afresh, taking into account a fresh status report submitted regarding the project.With the latest order, the insolvency proceedings stand withdrawn, subject to compliance with the terms of the settlement agreement between Mahagun and its financial creditor.
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