The National Company Law Tribunal (NCLT) has ruled that a 2019 property transaction involving former promoters of Housing Development and Infrastructure Ltd (HDIL) and a private buyer was undervalued and fraudulent. The tribunal found significant discrepancies in the sale documents, insufficient evidence of payment and inconsistencies in records submitted to establish ownership of a commercial office property in Mumbai’s Bandra West.

The transaction involved a property in Dheeraj Pali Arcade Building on Pali Road, which was registered for ₹49.94 lakh despite having a ready reckoner value of ₹2.38 crore. The NCLT has directed the buyer and former HDIL directors Rakesh Kumar Wadhawan and Sarang Rakesh Wadhawan to jointly contribute ₹2.38 crore to the company’s assets within 60 days. The ruling is significant because the transaction was registered shortly before insolvency proceedings against HDIL reached a critical stage.

NCLT Finds Problems With HDIL Property Transaction

The case concerns a commercial office premises in Dheeraj Pali Arcade Building, located on Pali Road in Bandra West, Mumbai.

The property was transferred through a registered sale agreement dated July 4, 2019. The transaction involved former HDIL directors Rakesh Kumar Wadhawan and Sarang Rakesh Wadhawan, along with a private buyer.

HDIL’s resolution professional challenged the transaction, arguing that the property had been sold at a substantially undervalued price.

According to the application, the sale consideration was ₹49.94 lakh, while the property’s ready reckoner value was ₹2.38 crore.

The resolution professional also pointed out that HDIL’s books of accounts did not contain a corresponding entry establishing that the company had received the sale proceeds.

The tribunal examined the transaction and found that the available documentation did not adequately establish the claimed payment and ownership history.