Can a ₹1 Crore Dispute Derail a ₹210 Crore Housing Project?
Imagine a housing project moving forward with ₹210 crore from the government-backed SWAMIH Fund. Suddenly, one investor asks the NCLT to place the developer under insolvency over a disputed ₹1 crore transaction—and claims more than ₹16 crore. Should the entire project, its homebuyers and public-backed investment be put at risk? The NCLT Allahabad Bench said no not in this case . It found that the money was given as a business investment, not as a financial loan. Therefore, the investor could not use the Insolvency and Bankruptcy Code, 2016 (IBC) to recover it. What Happened? Nivedan Fin Invest Lease Limited gave ₹1 crore to real estate developer Cosmos Infraestate Private Limited in June 2018. Nivedan later claimed that the amount was a loan and that the developer had failed to repay it. Its total claim increased to approximately ₹16.82 crore, including: ₹1 crore as the original amount; Interest calculated at 3% per month; and A late-payment penalty e...
