Home finance lenders are not financial creditors to developers

Home finance

In a recent judgment in Indiabulls Housing Finance Ltd v Rudra Buildwell Projects (P) Ltd, the National Company Law Appellate Tribunal (NCLAT) dismissed the appeal of Indiabulls claiming to be a financial creditor of Rudra.

Indiabulls had sanctioned a home loan of ₹7.3 million (US$106,675) to Devender Singh and Sushma Rajput to buy a flat developed by Rudra in April 2015. A tripartite agreement was executed between Indiabulls, the developer and the borrowers, according to which the developer assumed the liability of interest payments by the borrowers for 24 months from 2015 to 2017.

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The dispute digest is compiled by Bhasin & Co, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in. Readers should not act on the basis of this information without seeking professional legal advice.