Insolvency plea filed against DB Realty

LIC Housing Finance Ltd has filed a petition against DB Realty Ltd before the Mumbai bench of National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016. The next date of hearing is slated on Oct 16. While an email sent to LIC Housing Finance and calls to DB Realty did not elicit a response at the time of publishing the story, the nonbanking finance company's counsel did not confirm or deny the development. DB Realty has defaulted on payment of dues over 306 mln rupees of principal amount and interest payment of 64 mln rupees to LIC Housing Finance since January 2016, the real estate firm's annual report 2016-17 (Apr-Mar) showed.

DB Realty had taken working capital loans from LIC Housing Finance for financing construction costs of various projects owned by its subsidiaries in 2013. The loans were converted into term loans of longer tenure and repayment schedule was extended by 12 months to January 2016. The company's land parcel at Andheri suburb in Mumbai is mortgaged against the loans.