Wilful Default entities are those who have the capacity but does not repay the loans, siphon off the fund, diverts the funds or sells off the mortgaged assets without approval of the banks. In March 2018, the proportion of wilful default in total NPA comprised 44%. Such worrisome figures reinforce the quest to study the issue in-depth; it is impelling to explore the phenomenon and figure out the reason behind such a brazen and rampant act of borrowing and wilfully not repaying. The objective is to find understand legal aspects of the wilful default. The study is descriptive in nature with content analysis from secondary sources like Insolvency and Bankruptcy Law, 2016, Companies Act, 2013, SARFAESI Act, 2002, The Recovery Of Debts Due To Banks And Financial Institutions Act, 1993, Securities and Exchange Board of India Act, and Master Circular of RBI. The research finds that various laws are concurrent to each other and have mild penalty. Only in Companies Act 2013 the penalty is harsher than others. Additionally, preventative measures for the banks have been suggested.