Tikkavarapu Subbi Rami Reddy (or T Subbarami Reddy) has been “waved” (i.e. fully absolved) from bankruptcy.

Tikkavarapu Subbi Rami Reddy (or T Subbarami Reddy) has been “waved” (i.e. fully absolved) from bankruptcy.

What is known

The company Gayatri Projects, which is promoted by T Subbarami Reddy and his family, has been under insolvency / bankruptcy proceedings. 

In September 2025, the NCLT (National Company Law Tribunal) Hyderabad bench approved a one-time settlement (OTS) plan by the promoters. Under that plan, promoters will pay part of the dues, and lenders have agreed (97% of lenders) to write off (i.e. waive) a large portion (almost ₹5,700 cr) of the debt. 

The news says that under this arrangement, banks “effectively wrote off” ~₹5,700 crore (which is about 70% of the total due) as part of the settlement. 

But that is not the same as a clean “bankruptcy waiver” of all obligations. It is a negotiated settlement (with conditions) approved by the tribunal. 

Also, in May 2024, the promoters filed a petition against liquidation and sought settlement under Section 12A of the Insolvency & Bankruptcy Code (IBC). 

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Interpretation & caveats

The “waiver” of ~₹5,700 cr means lenders agreed to not fully demand or pursue part of the dues, under a settlement plan. It does not necessarily mean all liabilities are dismissed or that Reddy is fully freed of all claims.

The settlement is subject to compliance with the conditions set by NCLT / court — e.g. payment deadlines, covering guarantees, etc. 

Courts / tribunals may reserve rights to revive proceedings or enforce guarantees if conditions are violated. 

Also, the legal status of personal guarantees, liabilities outside the corporate entity, regulatory actions, or related claims may still persist even after an OTS.

Got it — I checked the latest reporting and tribunal records. Short answer: not a blanket “bankruptcy waiver”, but NCLT has approved a one-time settlement (OTS) that lets the promoters (T. Subbarami Reddy & family) exit the corporate insolvency process after they pay a fixed amount — and under that deal lenders have agreed to write off a large portion of the outstanding debt. 

What the records/news say (key facts)

The Hyderabad bench of the NCLT approved a ₹2,400 crore one-time settlement proposed by the promoters to resolve approximately ₹8,100 crore of dues owed to a consortium of lenders. 

Because lenders will receive part of the debt under the OTS (promoters paying ~₹2,400 cr plus other recoveries), media reports say banks have effectively written off roughly ₹5,700 crore (≈70% of the total dues). This is how the “waiver” number is being reported. 

The company’s public filings and exchanges indicate the corporate insolvency (CIRP) process is closed pursuant to the NCLT order (copy of order referenced in the company filing). 

Official insolvency/tribunal records (IBBI / NCLT case entries) show the matter has multiple IAs and orders over 2023–2025 and list the relevant case numbers — i.e., this was a formal, court-approved resolution, not an informal write-off. 

Important interpretation / caveats

This is a negotiated settlement approved by the tribunal, not an unconditional cancellation of all liabilities. Promoters must comply with the settlement terms (payments, covering guarantees, etc.). If conditions aren’t met, creditors can pursue remedies provided by the order. 

Personal guarantees, bank guarantees, regulatory or criminal proceedings, and third-party claims may still exist separately — an NCLT OTS typically resolves the corporate CIRP and creditors’ claims against the corporate debtor per the plan, but it does not automatically erase every possible legal exposure of individuals unless specifically addressed. 

Conclusion

So the media headline that “loans were waived” is based on the fact that lenders accepted an OTS that recovers only part of the total dues and wrote off the rest. That’s accurate as reporting, but it is not the same as saying Subbarami Reddy was fully and unconditionally freed from every bankruptcy or legal liability — it’s a tribunal-approved settlement that closes the corporate insolvency process subject to the plan’s terms. 

That’s the heart of the matter. Let me break it down in plain terms about what happened to the system and public money in the case of Gayatri Projects and T. Subbarami Reddy:

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1. The System (Legal & Banking Framework)

India’s Insolvency and Bankruptcy Code (IBC) allows stressed companies to either be liquidated or resolved through a settlement plan.

In this case, instead of liquidation, the promoters proposed a One-Time Settlement (OTS) which the NCLT approved. This is fully legal under Section 12A of IBC, provided lenders (banks) representing over 90% of dues agree.

Here, about 97% of lenders voted in favor. That’s why the tribunal closed the insolvency case.

So, system-wise, the law functioned as designed: creditors and tribunal agreed to a partial recovery instead of dragging through liquidation (which may have yielded even less).

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2. Public Money (Banks & Write-off)

Gayatri Projects owed about ₹8,100 crore.

Under the OTS, lenders get about ₹2,400 crore (plus some recovery from guarantees/assets).

That means around ₹5,700 crore is written off. This write-off comes from banks, which largely hold public money (deposits, PSU banks, and taxpayers indirectly backing them).

So, in effect, the public system absorbs the loss. This is why people often call it a “waiver.”

3. Why Banks Accept Write-offs

Banks sometimes agree to such deals because:

Liquidation might fetch even lower recovery (pennies on the rupee).

A settlement brings in quicker cash flow.

Pressure from promoters, politics, or practical banking calculations.

But for the public, it looks like the rich escape with part-payment while losses are socialized.

4. Bigger Implications

Moral hazard: It creates the perception that big borrowers can default, negotiate, and settle cheaply, while small borrowers (farmers, MSMEs, individuals) don’t get such flexibility.

Banking health: These kinds of haircuts weaken public banks’ balance sheets. Ultimately, it may need recapitalization by the government — meaning taxpayers bear the cost.

System trust: Ordinary citizens may feel the system protects elites more than the common person.

✅ Ultimately:

System: Legally, the IBC worked as per its rules (OTS allowed, approved by lenders & NCLT).

Public money: About ₹5,700 crore of public bank loans was effectively lost (not fully recoverable). The burden indirectly falls on depositors, taxpayers, and the broader economy.