Parsvnath Developers dragged to insolvency court by ARCIL

Realty developer Parsvnath Developers has been admitted into corporate insolvency resolution process (CIRP) by the National Company Law Tribunal (NCLT), New Delhi Bench, after a prolonged legal and financial battle with lender Sammaan Capital and subsequently Asset Reconstruction Company India Limited (ARCIL).

The insolvency proceedings stem from a Section 7 petition filed by Sammaan Capital, formerly Indiabulls Housing Finance, over alleged loan defaults by Parsvnath. The debt was later assigned to ARCIL. The tribunal admitted the company into insolvency on April 30, 2026, after settlement talks between the parties repeatedly failed.

In its defence before the tribunal, Parsvnath claimed that the lender had sanctioned loans worth Rs 4,861.25 crore, of which Rs 4,153.26 crore was disbursed, while around Rs 394.36 crore was allegedly deducted upfront or recovered immediately upon disbursal.

The company argued that it and its group entities had already repaid Rs 4,696.01 crore, including over Rs 1,006 crore in interest, and contended that after reconciliation of accounts, no amount would remain payable to the lender. Parsvnath further alleged that the financial creditor imposed exorbitant interest rates, arbitrarily foreclosed loan accounts and failed to provide complete statements of accounts despite repeated requests.

The developer also relied on multiple arbitration and Delhi High Court proceedings to resist insolvency admission, arguing that disputes over reconciliation of accounts, release of securities and refund of alleged excess payments should be resolved through arbitration.

Court records show that the matter witnessed several rounds of adjournments between 2025 and 2026 as both sides explored settlement options. Parsvnath deposited and proposed payments running into tens of crores, including Rs 75 crore before the Delhi High Court and additional payments of over Rs 46 crore to the creditor during negotiations.

However, the NCLT noted that despite repeated opportunities, the parties failed to arrive at a final settlement. The tribunal observed that disputes relating to reconciliation and counterclaims could be addressed during the resolution process and were not sufficient grounds to reject admission of the insolvency petition.

The tribunal also referred to the Supreme Court’s ruling in B. Prashanth Hegde vs State Bank of India to hold that set-offs and counterclaims may be considered during submission of claims before the resolution professional, but do not bar admission under the Insolvency and Bankruptcy Code.

Manoj Kumar Anand has been appointed as the interim resolution professional (IRP). Creditors have been asked to submit their claims by May 27, 2026.

Founded in 1990, Parsvnath Developers was once among the leading listed real estate developers in north India, with a large portfolio of residential, commercial and township projects. Over the past decade, however, the company has struggled with mounting debt, delayed projects and weak cash flows amid a prolonged slowdown in the real estate sector.

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