96-cr loan due, realty major loses 3 properties

Mumbai: Three properties owned by Orbit Corporation, a developer listed on the Bombay Stock Exchange, were attached by Life Insurance Corporation Housing Finance Ltd for nonrepayment of Rs 96- crore loan under the Securitisation Act.      Through a public notice on Wednesday, LIC Housing Finance said that it took physical possession of one of the three properties, Orbit Residency Park, which is spread over 1.7 lakh sq ft in Andheri. Orbit's liabilities of Rs 96 crore include repayment of loan availed and the interest on the amount. The orders to attach and take physical possession of the three properties measuring roughly 2.5 lakh sq ft—26,000 sq ft at Orbit Corporation's Lower Parel project Orbit Grand, 1.7 lakh sq ft at Orbit Residency Park in Andheri and 45,600 sq ft space at Orbit Midtown at Lalbaug—were recently passed by chief metropolitan magistrate M B Bage following an application filed by LIC Housing Finance. The attachment order may create problems for the 171 people flat buyers at the three properties.      LIC Housing Finance had sanctioned a loan of Rs 325 crore to Orbit. The three properties were mortgaged for securing the loan along with hypothecated receivables from seven of its luxury projects. Orbit had secured loans from LIC Housing Finance through personal guarantees executed by its directors Ravikiran Aggarwal and Pujit Aggarwal.      Of the Rs 325 crore, Orbit claimed to avail a loan of only Rs 260 crore. A sum of Rs 164 crore from the Rs 260 crore was repaid in 2010. But as the developer failed to repay the balance loan of Rs 96 crore, the housing finance company took action.      In August, LIC Housing Finance had classified Orbit's account as a non-performing asset and served a recovery notice to the developer known for its premium south and central Mumbai developments.      An email query to LIC Housing Finance did not elicit any response.      "We have repaid Rs 164 crore by 2010-end. Only Rs 96 crore was left unpaid. Following the notice, we met with senior LIC Housing Finance officials and reached an understanding for repaying the loan. I suppose this order is part of the legal process they have to follow," said Pujit Aggarwal, MD of Orbit. "No flat buyers will get affected as the order excludes almost 75% of the development. We hope to clear the loan at the earliest."      "The delay in repayment was because the two projects (Orbit Grand and Orbit Residency Park) for which the term loan secured were stuck in regulatory deadlock since 2011. The deadlock stalled construction as well as sales and cash flow," he added. The firm had got regulatory approvals for the two projects in May. Orbit Residency Park in Andheri