Debt-ridden Housing Development and Infrastructure (HDIL) August 20 said the company will face insolvency proceedings under the provisions of the Insolvency and Bankruptcy Code (IBC) as per an order passed by the National Company Law Tribunal (NCLT).
The NCLT order is in response to an application filed by lender Bank of India, to which HDIL is believed to owe over Rs 520 crore.
"Housing Development and Infrastructure Limited, (the "Company") has been admitted under the provisions of The Insolvency Bankruptcy Code, 2016 ('IBC') in term of order dated August 20, 2019, passed by Hon'ble National Company Law Tribunal, Special Bench ('NCLT'), pursuant to an application filed by the Bank of India under Section 7 of IBe," the company said in a release to the stock exchange.
The company plans to challenge the NCLT order and said it will soon appeal to the National Company Law Appellate Tribunal (NCLAT) against the order.
As per a recent media report, Ocean Deity Investment Holdings has alleged in a complaint to the Reserve Bank of India that Yes Bank and realty major HDIL had moved funds to evergreen loans between March 2014 and March 2016.
The company has also drawn flak of the Mumbai Slum Rehabilitation Authority (SRA) for not complying with regulations and issuing flats without proper certifications.
Insolvency proceedings have been initiated against many real estate developers, including Jaypee Infratech, mainly because of default in loan repayment to banks as well delivery of flats to home buyers.
With inputs from PTI
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