Supreme Court upholds insolvency of JW Marriott Bengaluru and Crowne Plaza Pune owners

The Supreme Court on 15 October 2026 upheld the insolvency proceedings against GSTAAD Hotels Pvt. Ltd., which owns the JW Marriott Hotel in Bengaluru, and Neo Capricorn Plaza Pvt. Ltd., which owns the Crowne Plaza Hotel in Pune. The court dismissed appeals by the promoters and held that a company's profitability is no defence once a loan default is shown.

What Happened

According to the judgment, Piramal Finance lent Rs 600 crore to the two companies in 2017, and the companies later took further loans under the government's Emergency Credit Line Guarantee Scheme (ECLGS). In December 2022, the loans were assigned to Omkara Asset Reconstruction Pvt. Ltd., which in February 2023 recalled about Rs 666.53 crore from GSTAAD Hotels and about Rs 119.99 crore from Neo Capricorn Plaza.

The National Company Law Tribunal in Mumbai admitted both companies into insolvency on 8 July 2025, after an earlier admission had been sent back for fresh hearing. The National Company Law Appellate Tribunal (NCLAT) upheld that order on 19 August 2025.

The Supreme Court held that the hearing on admitting a lender's insolvency plea is summary, and that the tribunal need only find a debt and a default, not reconcile every rupee of the accounts. It held that a record of default with an information utility, a regulated repository of loan data, is by itself sufficient and can be displaced only by clear and compelling material, not a bare denial. The court said positive operating profit says nothing about a company's ability to pay lenders on time, noting that GSTAAD Hotels' own accounts showed a debt service coverage ratio of 0.12 for 2022-23. It also noted that an amendment to the Insolvency and Bankruptcy Code notified in April 2026 now requires tribunals to admit a plea once a default is established.

What It Means

The insolvency process for both hotel companies will now proceed, the court directed. The judgment makes it harder for borrowers to resist a lender's insolvency plea by pointing to profits or disputing account entries, according to the court's reasoning.

For lenders, borrowers and guarantors, the ruling confirms that a default, not balance-sheet insolvency, is the trigger under the Code. As the Supreme Court's judgment, it is final.

Source: Supreme Court order