Interim Relief for Indiabulls Housing

A two-judge bench of the Delhi High Court on Wednesday stayed the interim relief given to Indiabulls Housing Finance from paying dues to investors who hold non-convertible debentures (NCDs) of the company, a development expected to have a wide-ranging impact on NCD issuers and debt mutual funds. The ruling effectively means that borrowers will no longer be able to unilaterally defer payments to mutual funds. It also means that mutual funds, one of the biggest holders of NCDs, will be able to initiate coercive action against NCD issuers in case of delayed payments. Indiabulls had moved the Delhi High Court in mid-April seeking relief from meeting its NCD obligations since it was unable to recover dues from its borrowers since the Reserve Bank of India (RBI) had imposed a moratorium on loan repayments.