Justice Gauri Godse pronounced the order on 6th April 2026 in the commercial summary suit filed by IL&FS. The court made it clear that insolvency moratoriums protecting guarantors do not stop the lender from pursuing the principal borrower.

Simple Breakdown of the Case

• Lender: IL&FS Financial Services Limited
• Main Borrower (Defendant 1): Serveall Constructions Private Limited – the company that actually took the term loan.
• Corporate Guarantor (Defendant 2): Housing Development and Infrastructure Limited (HDIL) – the well-known real estate developer currently under insolvency.
• Personal Guarantors (Defendants 3 & 4): Rakesh Wadhawan and Sarang Wadhawan (promoters of HDIL).

The total amount claimed is ₹203,66,31,506 (roughly ₹204 crore).

HDIL has been under Corporate Insolvency Resolution Process (CIRP) since 20 August 2019, with a moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC) in place. The two Wadhawans also face personal insolvency proceedings under Section 95, triggering an interim moratorium under Section 96.

IL&FS told the court it wants to proceed only against Serveall Constructions right now and will wait for the moratoriums on HDIL and the Wadhawans to end before going after them.

What the Judge Decided

Justice Godse held that:

• The moratorium protecting HDIL (as corporate guarantor) does not give any shield to the actual borrower — Serveall Constructions.
• The interim moratorium on the personal guarantors (Wadhawans) also does not extend to the principal borrower.
• Lenders can continue recovery action against the main borrower even if guarantors are under IBC protection.

The court distinguished this from earlier cases and relied on Supreme Court rulings to explain that the protection under IBC is for the specific debtor under insolvency, not for everyone connected to the debt.

Final Order: The summary suit will now proceed only against Serveall Constructions Private Limited. Proceedings against HDIL and the two Wadhawans remain stayed until their moratoriums end. IL&FS can revive claims against the guarantors later.

This ruling is seen as helpful for banks and financial institutions, as it prevents borrowers from indirectly escaping liability just because their guarantors have filed for insolvency.

Also Read: Further Trouble For HDIL Builders.

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Justice Firdosh P. Pooniwalla, in his judgment dated 25 March 2026 in Writ Petition No. 973 of 2023, quashed the orders of the Divisional Joint Registrar and restored the Assistant Registrar’s decision rejecting the buyers’ membership claims.

The Case

The petitioner societies — Dheeraj Dreams Building No.1, 3, 4A, and 4B CHS Ltd. — manage several wings of the residential complex. The Full Occupancy Certificate was issued by the Municipal Corporation of Greater Mumbai (MCGM) in 2009. Floor plans attached to all legitimate flat purchases clearly marked certain open spaces on the 8th and 15th floors as refuge areas — compulsory unconstructed safety zones required under building regulations for emergency evacuation during fire or other hazards.

Despite this, Housing Development and Infrastructure Ltd (HDIL), the developer, executed five registered Agreements for Sale on 30 April 2019 with two individuals, Hukamsingh B. Sewadsha and Chetansingh B. Sewadsha, describing these refuge areas as residential flats (including units like A-1506, D-1501, etc.).

By then, key legal milestones had already passed:

• The societies were registered in 2008-09 with no unsold flats remaining. HDIL did not join as a member, which it was legally required to do under Section 10 of the Maharashtra Ownership Flats Act (MOFA) if any flats were unsold.
• In 2017, the societies obtained a Certificate of Entitlement for Deemed Conveyance, which divested the developer of further rights to sell or deal with the property.

The two buyers approached the societies seeking membership based on these agreements. When refused, they moved the Assistant Registrar under Section 22(2) of the Maharashtra Co-operative Societies (MCS) Act. The Assistant Registrar rejected their application on 19 October 2020, observing that the developer had no right to sell non-existent flats.

The buyers then filed revision applications. The Divisional Joint Registrar reversed the order on 22 July 2022, directing the societies to admit them as members, and an execution order followed in October 2022.

Court’s Strong Observations

Justice Pooniwalla held that:

• The so-called “flats” were refuge areas, not constructed residential units. They were shown as open spaces in the original plans and continue to be assessed as refuge areas by municipal authorities (with no property tax levied on them as flats).
• HDIL had no authority to sell these spaces after the Deemed Conveyance entitlement certificate was issued.
• Forcing the societies to admit the buyers would violate Section 154B-5 of the MCS Act, which prohibits admitting more members than the actual number of flats available in the society.

The court distinguished this case from earlier precedents (such as the Videocon Appliances judgment), noting that the issue here was not merely “unauthorised construction” but the complete non-existence of any flat. A society cannot be compelled to breach a statutory provision.

The High Court quashed both the revision order of 22 July 2022 and the subsequent execution order. It restored the Assistant Registrar’s order of 19 October 2020, declaring that the societies were right in refusing membership.

Significance

This judgment reinforces that:

• Refuge areas, meant for life safety, cannot be converted or sold as private flats.
• Once the Deemed Conveyance process begins, a developer loses the right to create new sales in the project.
• Cooperative societies have strong legal grounds to resist attempts to inflate membership beyond the actual number of flats.

The refuge areas remain under the control and possession of the societies.

The buyers’ agreements for sale were not directly declared void in this writ petition (a separate civil suit for that purpose is reportedly pending), but the ruling makes it clear that such transactions carry no enforceable right to membership in the housing society.

This decision is likely to be welcomed by housing societies across Maharashtra facing similar attempts to sell common or prohibited spaces.

Also Read: HDIL Homebuyers Get No Relief From MahaRERA

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Complaint Adjourned Sine Die

The complaint, filed by Durga Amitava Ghosh and Amitava Ghosh (Complaint No. CC006000000197786), sought relief against HDIL. However, during the hearing on December 16, 2024, the developer requested that the matter be kept in abeyance, citing the ongoing CIRP initiated by the National Company Law Tribunal (NCLT) on August 20, 2019. As per Section 14 of the IBC, a moratorium is in place, preventing the initiation or continuation of legal proceedings against the corporate debtor.

Homebuyers’ Plea Falls Short

The complainants argued that despite the CIRP, MahaRERA could still grant relief to allottees, citing the Supreme Court’s judgment in the Pioneer Urban Land and Infrastructure Ltd. case. They emphasized that homebuyers are treated as financial creditors under the IBC, granting them the right to continue pursuing their claims.

However, the MahaRERA authority, presided over by Ravindra Deshpande, Member II, upheld the moratorium and adjourned the complaint sine die (without a specified date for resumption) in the order issued on March 4, 2025. The complainants were advised to approach MahaRERA after the insolvency process concludes if they still seek redressal.

A Ray of Hope for Homebuyers

While the complaint remains on hold, the authority has instructed the respondent to facilitate the complainants in filing their claims within the CIRP framework. This development leaves homebuyers in a state of uncertainty as they await the outcome of HDIL’s insolvency resolution.

The Long Road Ahead

HDIL, once a prominent real estate developer, has been embroiled in financial troubles since 2019. The insolvency proceedings have put several projects and investments on hold, leaving numerous homebuyers and creditors uncertain about the fate of their investments.

As the resolution process continues, affected homebuyers are left hoping for a favorable outcome that can revive stalled projects and ensure justice for those who invested their hard-earned money.

The post HDIL Insolvency Proceedings Stall MahaRERA Complaint – Homebuyers Left in Limbo appeared first on Square Feat India.

By Varun Singh

MHADA’s Mumbai Board floated a tender last week for carrying out various work at Patra Chawl Redevlopmemt.

The works include, Survey, planning, designing, building construction, structural restoration, obtaining all relevant permissions, amendments and required completion/occupancy certificate from concerned local authority on lumpsum turnkey basis for construction of balance work of rehab portion at sector R-9 of Siddharth Nagar Patra chawl redevelopment project located in Goregaon West Mumbai.

The e-tender dates are from November 2 to December 17 the pre-bid date is November 17 at 11 AM in the office of the chief engineer at MHADA headquarters.

The e-tender will be opened on December 21, 2021.

The tender has been floated by Mumbai Board of MHADA.

The housing minister of state, Jitendra Awhad tweeted, “The redevelopment project of Patra Chawl at Goregaon, which has been stalled for the last several years, is being launched. The ad has come out. Actual work will begin in the next few days and those displaced in Patra Chawl will get their own homes.”

Patra Chawl for a long time has been stuck for various reasons.

In the year 2007, the project of redevelopment of Patra Chawl was given to a private developer by MHADA.

The area of the project is close to 47 acre comprising of 675 tenants.

Earlier this year, chief minister of the state Uddhav Thackeray asked MHADA to formulate a strategy and work on a plan to redevelop Patra Chawl and rehabilitate the tenants.

Post which finally MHADA has come out with a ₹142 crore e-tender for the redevelopment and rehabilitation of the project.

Also Read: Shiv Sena MLA Applies For MHADA Home, Finds Mumbai House Rent Unaffordable

The post MHADA Floats Tender Worth ₹142 Crore For Redevelopment of This Mumbai Project appeared first on Square Feat India.

By Varun Singh

Three homebuyers approached MahaRERA seeking relief against HDIL builder. However, they couldn’t be granted any relief from MahaRERA at this juncture.

Homebuyers Dharmedra Singh, Gaurav Seth and Neeraj Sharma approached MahaRERA.

They all are allottees in the project HDIL Paradise, located at Palghar west.

The homebuyers claimed that, the date of possession was long over, but they hadn’t received possession yet.

Also Read: Home Buyers Of HDIL Projects Wary, Post PMC Bank Scam

The project work was stalled, and incomplete. Some homebuyers sought from MahaRERA that the builder hand them possession at the earliest and pay them interest for delay.

Some homebuyers sought that HDIL refund them the money paid along with interest and compensation.

Advocate representing the respondent informed MahaRERA, that HDIL is under an insolvency resolution process and an insolvency resolution professional has been appointed by the NCLT order dated August 20, 2019.

Therefore these complaints cannot be proceeded until the insolvency resolution process is completed.

Also NCLT has imposed a moratorium against institution or continuation of any suits or proceedings against HDIL till insolvency resolution process is completed.

Also Read: Adani, Sunteck show interest to acquire HDIL

It was further informed that as soon as the Corporate Insolvency Resolution Process gets completed, claims of flat buyers in all the projects of HDIL will be settled in terms of the decision of the CoC, and subject to final approval of NCLT.

Thus view of these points Gautam Chaterjee, Chairman of MahaRERA, disposed off the complaint and said, “No relief under the provision of Real Estate (Regulation and Development) Act 2016 cannot be granted at this juncture.

HDIL builders are in trouble for quite some time. Many of there projects are stuck and the name of the promoters have popped up even in the PMC Bank Scam.

Adv Vinod Singh, a pracitisng advocate in Bombay High Court said, “The homebuyers will now have to wait till the final outcome of NCLT for them to get a final relief. They cannot even approach any other forum or court seeking relief against HDIL.”

Also Read: HDIL’s Wadhawan had gifted Bandra bungalow to trust in 2018

The post HDIL Homebuyers Get No Relief From MahaRERA appeared first on Square Feat India.

By Varun Singh

HDIL’s Rakesh Wadhawan and his wife Malti Wadhawan gifted the Wadahawan House located in Bandra to the family trust.

The trust is named Wadhwan Family Personal Assets Trust and has Anu Wadhawan, Malti Wadhawan, Rama Joshi and Madhuri Motwani as the trustees.

According to documents available with SquareFeatIndia Wadhawan House stands on a land measuring 9001 square foot.

The property has a built up area of 14, 585 square foot and is located in Bandra’s Pali Hill area.

HDIL’s promoter Rakesh Wadhawan and his wife Malti Wadhawan gifted the property to the family trust on November 3, 2018.

Documents reveal that Wadhawan House comprises of two basements, a ground floor and three upper floors. A stamp duty of Rs 1.47 crore was paid while registering the gift deed.

The address in the documents show that HDIL’s Rakesh Wadhawan, Malti and Anu reside at Wadhawan House. While the other two trustees have different addresses one is in Khar, the other in Bandra.

Rakesh Wadhawan gifted the bungalow to the trust around 10-11 months before the PMC Bank scam came out in the open.

Since the mismanagement of funds of the bank has come out in the open, HDIL’s Rakesh Wadhawan and Sarang Wadhawan have been facing a stormy weather.

Recently, the recovery cell of PMC Bank had put a luxurious Ferreti Yacht 881 and two aircrafts a Dassault Falcon and a Bombardier Challenger on sale.

Meanwhile, Adani, Sunteck and four other companies have shown interest in acquiring the debt laden HDIL, HDIL, is currently under Corporate Insolvency Resolution Process.

A total of six parties showed interest in acquiring the debt laden HDIL. HDIL is currently under Corporate insolvency resolution process. The details came out via a regulatory filing.

Also Read: Adani, Sunteck show interest to acquire HDIL

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By Varun Singh

Indiabulls Commercial Credit Ltd earlier this month took symbolic possession of three villas in Juhu, and several flats connected to Wadhawans and real estate companies in Juhu and Bandra.

On August 4, 2020, Indiabulls took symbolic possession of these properties located in Mumbai.

Indiabulls issued two separate public notices recently. The first notice is about three Villas and nine flats located in a building named Equest in Juhu. The same notice talks about three flats in the building Monticello located at Mount Mary road, Bandra.

The notice states that, Indiabulls Commercial Credit Ltd, first issued a demand notice dated March 9, 2020 upon borrowers.

The list of borrowers include, Juhu Real Estate Developers Pvt Ltd, Samudra Developers Pvt Ltd, JVPD One Builder LLP, Dheeraj Wadhawan (guarantor) and RKW Developer Pvt Ltd (Guarantor).

The first demand notice was asking them to repay Rs 26.70 crore and interest along with income tax deducted at source amounting to Rs 1.67 crore within 60 days.

However, the borrowers failed to repay and hence Indiabulls took symbolic possession of the properties on August 4, 2020.

The properties in Equest, Juhu measured a total of 22,857 sq ft, while that of Monticello in Bandra measures 10,349 sq ft plus 1479 sq ft (terrace area).

The second notice is after the same borrowers listed above failed to repay a total loan amount of Rs 25.13 crore plus Rs 1.10 crore as interest along with income tax deducted at source.

Post which Indiabulls took symbolic possession of land at Monticello, Bandra measuring 919 sq mts and land at Equest, Bandra measuring 3,311 sq mts.

The properties are now subject to charge of Indiabulls.

Also Read: PMC Bank puts on sale a yacht and two aircrafts

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By Varun Singh

A total of six parties showed interest in acquiring the debt laden HDIL. HDIL is currently under Corporate insolvency resolution process. The details came out via a regulatory filing.

The six companies that submitted Expression of Interest for Resolution plan of HDIL includes. Adani Properties Private Limited, Suraksha Asset Reconstruction Limited, Sunteck Realty Limited, International Asset Reconstruction Company Private Limited, N S Software, Harsha Vardhan Reddy.

Expression of Interest (EOI) inviting Resolution Applicants was published on February 16, 2020 and subsequently revised on March 9, 2020, March 24, 2020, April 24 2020, May 16 2020 and July 22, 2020. Submission of EOI was closed on July 31 2020. 

The Resolution Professional received six EOI from interested parties. Of which, Adani, Suraksha and Sunteck were found eligible.

While, N S Software and Reddy were found ineligible. International Asset Reconstruction Company Private Limited has not submitted the undertaking under section 29A of IBC in the required format on Stamp paper duly signed, stamped and notarized. They will become eligible once the required undertaking is submitted on or before August 8, 2020.

The Eligibility Criteria included Minimum Net worth (Rs 500 Crores) /Assets Under Management  (Rs 2,000 Crores)/ Committed Fun (Rs 250 Crores) as on March 31, 2019.

Any objection to inclusion or exclusion of a prospective resolution applicant in the provisional list may be made with supporting documents within five days from the date of issue of the provisional list i.e. by August 8, 2020 by sending an e‐mail on eoi.hdil@gmail.com.

After considering the objections, if any, received by the Resolution Professional, final list of Prospective Resolution Applicants (PRAs) will be published. The final list will also be uploaded on the website of the HDIL.

HDIL is under Corporate Insolvency Resolution Process pursuant to the provisions of the Insolvency and Bankruptcy Code, 2016. Its affairs,business and assets are being managed by the Resolution Professional, Abhay N Manudhane appointed by National Company Law Tribunal, Mumbai Bench, Mumbai.

Several home buyers are stuck after they invested in the properties being built by HDIL. They had become further wary after HDIL’s name cropped up in the PMC Bank Scam.

Many home buyers are hopeful that the stuck projects might move and things would work in their favour if big companies with sufficient fund come in.

Also Read: PMC Bank puts on sale a yacht and two aircrafts

The post Adani, Sunteck show interest to acquire HDIL appeared first on Square Feat India.

By Varun Singh

PMC Bank will be selling a yacht and two aircrafts in August. It has come out with a public notice for sale.

The sale notice has been put up by recovery cell of PMC Bank. Where it wants to sell a Ferreti Yacht 881, a Dassault Falcon and a Bombardier Challenger.

The yacht is docked at Galle Harbour in Srilanka, while the aircrafts are parked at Mumbai Airport.

The bank has not fixed a rate for the sale of the yacht and the aircrafts. It wants prospective bidders to give 10% of the offer price as EMD to it.

A PMC Bank official who is dealing with the sale said, “We have put these assets on sale, but haven’t fixed the rate for them.”

The banks expects prospective bidders to give them offers at which they wish to buy the assets.

The bank official says that those interested in buying these assets will get them inspected by experts. “We will sell the assets to whosoever quotes the highest price,” said the official.

According to the public notice, issued by the bank, they are selling three assets by inviting sealed bids. The sale is in compliance of an order by the Additional Chief Metropolitan Magistrate, Esplanade, Mumbai.

The bids for the yacht shall be opened on August 17, 2020 at 2 pm, at the Bhandup west office of the recovery cell of PMC Bank.

While that of the two aircrafts shall be opened on August 21, 2020 at the same office. During both the events, the administrator appointed by RBI stall be present.

The successful bidder shall have to pay 25% of the sale price adjusting the EMD amount within two days.

After which he will be issued a letter of sale, post which within seven days the bidder will have to pay the rest 75% amount of the sale price.

Last year the bank ran into a major controversy. The withdrawal limits for its depositors were also limited. Directors of HDIL, a real estate firm also are in trouble because of their alleged connections to the PMC Bank Scam.

The scam runs into several thousands of crores and the authorities are investigating the matter.

Also Read: Home Buyers Of HDIL Projects Wary, Post PMC Bank Scam

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By Varun Singh

Heard it right, the state government has given 15-days time to former chief secretary Johnny Joseph to provide a solution the issue of redevelopment of Patra Chawl, Goregaon. The process for redevelopment started in the year 2007.

The state government in March 2018 had appointed a one member committee under the chairmanship of former chief secretary Johnny Jospeh. The committee was appointed to carry out a thorough investigation in the Patra Chawl Redevelopment. The redevelopment was being carried out by a Guruashish Construction, a part of HDIL group at Siddharth Nagar Cooperative Housing Society a MHADA layout,

Jospeh submitted his report to the government after his investigation was completed.

In January 2018, MHADA had issued a termination notice to the developer Guruashish Constructions, a part of HDIL group, for not following the orders as well as not carrying out timely redevelopment of the project. MHADA issued the termination notice in order to take over the project from the private developer.

Also Read: Further Trouble For HDIL Builders.

Guruashish Constructions had signed an agreement with MHADA and Patra Chawl residents to redevelop the land and till date the project is incomplete. In the redevelopment MHADA was to get 1 lakh sq ft of built up area from the developer, who also had to rehabilitate the 672 tenants, both free of cost.

On January 13, 2020, Chief Minister of the state Uddhav Thackeray called for a meeting where he took up housing issues, and it is then that the Patra Chawl redevelopment issue was discussed.

During the discussion it was noted that the redevelopment process for Patra Chawl was initiated in 2007 and since then around 672 residents have been waiting for their homes.

There were complaints from the residents that they haven’t even received the rent from the developer for many months. The matter being in the High Court, the redevelopment of Petra Chawl will be delayed

Also MHADA had already carried out a lottery of 306 homes constructed on the share of land belonging to MHADA. However, even after two years post lottery these homes haven’t yet been distributed. All these issues were under the consideration of the government.

Finally the government had now decided that, Jospeh will come out with a solution for all the issues related to the Patra Chawl redevelopment within 15-days.

Joseph has been assigned the task to give. solution to the government on how to carry out redevelopment of Patra Chawl, rent for residents, the lottery by MHADA and submit the report within 15-days. He has to take the decision keeping in mind the ongoing legal case in the High Court.

Also Read: Home Buyers Of HDIL Projects Wary, Post PMC Bank Scam

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