Bank of India has submitted an application to the National Company Law Tribunal (NCLT) on Tuesday for initiating insolvency proceedings against debt-ridden realty firm HDIL.
In a regulatory filing to the BSE, the Mumbai-based real estate firm Housing Development and Infrastructure Ltd (HDIL) said the company has been “admitted under the provisions of Insolvency Bankruptcy Code (IBC) as per order passed by NCLT pursuant to an application filed by the Bank of India under Section 7 of IBC”.
The company further said it is under the process to file an appeal to National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.
On 5 June, the bankruptcy court had directed HDIL to pay Rs. 98 crore to Bank of India within four weeks. HDIL owes around Rs. 520 crore to Bank of India and had agreed to pay it in tranches.
Subir Kumar, an advocate representing HDIL said that “HDIL always wanted to settle the matter with Bank of India. There was upfront amount to be paid. At the group level, the company has paid more than ₹800 crore to various other banks. Therefore we couldn’t honour Bank of India.”
Apart from Bank of India, other public sector banks including Syndicate Bank, Corporation Bank, Union Corporation Bank among others have also filed separate petitions under Section 7 of the Insolvency and Bankruptcy Code (IBC) against HDIL to recover their dues.
Also, Insolvency proceedings have been initiated against many real estate developers, including Jaypee Infratech, mainly because of default in loan repayment to banks as well as delivery of flats to home buyers.