Economy in crisis: Housing giant HDIL sinks, insolvency proceeding begins

In what is seen as a sign of impending economic crisis, the Mumbai based housing giant, Housing Development and Infrastructure Ltd (HDIL) has gone insolvent.

The National Company Law Tribunal (NCLT) has ordered insolvency proceeding against the company, following which, the HDIL has appointed Abhay Narayan Manudhane as the interim resolution professional (IRP) to run the insolvency process on Friday.

In a regulatory filing, HDIL has stated that the IRP has been appointed to carry out the functions as mentioned under Insolvency and Bankruptcy Code (IBC).

Earlier this month, the National Company Law Tribunal (NCLT) had admitted an application filed by Bank of India to initiate insolvency proceedings against debt-ridden realty firm HDIL.

However, the housing giant has said that the company would file an appeal in the National Company Law Appellate Tribunal (NCLAT) against the order passed by the NCLT.

Due to defaults, failure to repay loans to banks and delay in delivering flats to homebuyers, NCLT has ordered insolvency proceedings against many real estate developers, including Jaypee Infratech recently.

On June 5, NCLT had directed HDIL to pay ₹980 million ($13.70 mln) to Bank of India. HDIL owes around ₹520 crore to Bank of India and it had agreed to pay it in tranches. However, it failed to repay the loan following which insolvency has been ordered.