An insolvency court in Mumbai allowed Supreme Housing and Hospitality Pvt Ltd to exit insolvency proceedings on Wednesday after it reach a settlement with lender ICICI Bank. A detailed order on the matter is awaited.

Canara Bank and ICICI Bank had taken Supreme Housing to insolvency court after the realtor defaulted on dues of more than ₹800 crore. After hearing the matter at length, a bench led by justices Ashish Kalia and Sanjeev Dutta reserved the order on 1 July. The order was in response to a petition filed by resolution professional Prashant Jain on 21 March, seeking a withdrawal of the insolvency application against the real estate company.

The withdrawal application was filed under Section 12A of the Insolvency and Bankruptcy Code, 2016, after ICICI Bank reached a settlement with the company. Section 12A permits the withdrawal of CIRP proceedings, provided it has the approval of 90% of the committee of creditors (CoC) and the NCLT is assured that the interests of all stakeholders are protected.

This makes Supreme Housing one of very few companies that have had insolvency proceedings withdrawn, with the process having become increasingly complex. Section 12A requires a 90% majority vote, which legal experts said is difficult to achieve in many cases. They added that even if some creditors reach an agreement with the company, other creditors can initiate bankruptcy proceedings under the IBC, potentially complicating or delaying the company’s exit from insolvency.

How it all began

Supreme Housing’s financial troubles began with a ₹390-crore term loan, sanctioned in 2014, which subsequently became a non-performing asset. In November 2022 the company was admitted into insolvency by the NCLT following Canara Bank’s petition under Section 7. However, the proceedings were withdrawn after the parties agreed to a one-time settlement, with an option to revive the insolvency in case of default.

Despite several proposals from Supreme Housing, most offers of a one-tie settlement were not supported by credible funding commitments, leading to continued defaults and a re-initiation of insolvency proceedings by Canara Bank.

While Canara Bank’s proceedings were pending, ICICI Bank also moved the NCLT under Section 7 of the IBC in January 2024, seeking admission of its claim against Supreme Housing over the same ₹390-crore loan.

The NCLT’s Mumbai Bench admitted the plea, prompting the company’s suspended board to approach the National Company Law Appellate Tribunal (NCLAT). The promoters argued they were in settlement negotiations with ICICI Bank, leading the NCLAT to initially grant a temporary stay. However, the appellate tribunal later vacated the stay, citing a lack of binding settlement terms and continued non-compliance.

Insolvency proceedings revived

With both ICICI Bank and Canara Bank pursuing action under IBC, the insolvency proceedings were revived in February 2025. Canara Bank filed claims amounting to over ₹580 crore with the resolution professional. Supreme Housing subsequently reached a settlement with ICICI Bank and filed a Section 12A application before the NCLT.

However, Canara Bank objected to the withdrawal and filed an intervention application, saying it remained a substantial creditor with unresolved claims exceeding ₹580 crore.

In June, Supreme Housing approached Canara Bank with a fresh settlement proposal, backed by Authum Investments and Infrastructure Limited. The offer included a full and final settlement of ₹460 crore, with ₹23 crore payable upfront and the remaining to be cleared within 90 days of Supreme Housing’s exit from insolvency. On 16 June, Canara Bank approved the proposal under specific conditions, clearing the way for a unified settlement with all major lenders.

Taking into account the settlement with both ICICI Bank and Canara Bank, and considering the consent of the creditors involved, the NCLT approved Supreme Housing’s Section 12A application.

Niyati Merchant, associate partner at MDP Legal represented Canara Bank while Rohan Agarwal and Sujit Lahoti appeared for Supreme Housing.