NCLT voids HDIL's Bandra office sale unless buyer and ex-directors pay Rs 2.38 crore
The NCLT's Mumbai bench held that HDIL's July 2019 sale of a Bandra office was undervalued and fraudulent, and ordered the buyer and two ex-directors to pay Rs 2.38 crore.
Key points
- The NCLT's Mumbai bench on 4 November 2026 held that HDIL's July 2019 sale of a Bandra office was undervalued and fraudulent.
- The tribunal found the office, with a ready reckoner value of Rs 2.25 crore, was sold for Rs 49.9 lakh with no proof of payment.
- The buyer and two former directors must pay Rs 2.38 crore within 60 days or the sale becomes void; the order may be appealed to the NCLAT.
The National Company Law Tribunal's Mumbai bench on 4 November 2026 held that the sale of a Bandra office by Housing Development and Infrastructure Limited (HDIL) in July 2019, weeks before it entered insolvency, was undervalued and, the tribunal held, made with intent to defraud creditors. It directed the buyer and two suspended directors to contribute Rs 2.38 crore within 60 days, or the sale becomes void.
What Happened
According to the order, HDIL was admitted into the corporate insolvency resolution process on 20 August 2019 on an application by Bank of India. Its resolution professional, who runs the company during insolvency, found that a first-floor commercial office in the Dheeraj Pali Arcade building on Pali Road, Bandra (West), had been registered in a buyer's name under a sale agreement dated 4 July 2019.
The tribunal noted that 4 July 2019 was the same day the insolvency petition against HDIL was reserved for orders. It held that the suspended directors sold the premises, which had a ready reckoner value of Rs 2.25 crore, for Rs 49.9 lakh, and found no proof that even that amount was paid or recorded in HDIL's books. The tribunal said the buyer and the company's side gave contradictory accounts of when the deal took place.
The tribunal declared the deal an undervalued transaction under Section 45 of the Insolvency and Bankruptcy Code, and a fraudulent and wrongful transaction under Section 66. Relying on an NCLAT ruling, it held the buyer, as beneficiary, equally liable with the two former directors. The three must together contribute Rs 2,38,18,000 to HDIL within 60 days; if they do not, the sale becomes void and the office must be handed over to the resolution professional.
What It Means
The order adds money, or the office itself, to the pool available to HDIL's creditors. It shows that insolvency law lets a resolution professional recover assets sold cheaply on the eve of insolvency, including from the buyer.
The order is the tribunal's ruling and may be appealed to the National Company Law Appellate Tribunal (NCLAT).
Source: NCLT order
Sources & Citations
- NCLT order — National Company Law Tribunal