₹80 Crore Default, Yet Insolvency Withdrawn Against Poddar Housing—Why?

STCI Finance Withdraws Insolvency Case Against Poddar Housing Despite ₹80 Crore Default, Raising NPA and Public Interest Concerns

STCI Finance withdrew insolvency action against Poddar Housing despite admitted defaults exceeding ₹80 crore, raising questions over NPA management, public sector accountability, trust property mortgages, homebuyer risk, and regulatory silence, prompting calls for Enforcement Directorate and Economic Offences Wing investigation. With taxpayer-backed institutions exposed and homebuyers facing uncertainty, experts are questioning whether settlement-driven withdrawals are masking deeper financial stress and whether enforcement agencies should intervene to safeguard public interest.

Banks often route risky real estate exposure through bank-promoted financing arms to soften Reserve Bank of India oversight, allowing indirect support to influential developers without stringent non-performing asset recognition or early corrective action.

This pattern earlier surfaced in the HDFC Capital Advisors–Poddar Housing case and appears to repeat with STCI Finance Limited, formerly Securities Trading Corporation of India, raising systemic governance questions.

Public Sector Ownership and Taxpayer Risk in STCI Finance

STCI Finance is majority-owned by public sector banks, holding nearly 70 percent equity, while public sector insurance companies own approximately eight percent, making its financial health directly linked to taxpayer money.

Any erosion of asset quality at STCI therefore impacts public finances, pension funds, and insurance policyholders, amplifying the need for transparency and strict compliance with insolvency and recovery frameworks.

According to Poddar Housing’s audited balance sheets, the developer admitted defaults exceeding ₹80 crore, excluding accumulated interest and penalties, establishing clear financial stress under Insolvency and Bankruptcy Code thresholds.

Insolvency Proceedings at NCLT and the Sudden Withdrawal

The admitted default compelled STCI Finance to initiate insolvency proceedings before the National Company Law Tribunal in early 2024, following statutory obligations under the Insolvency and Bankruptcy Code.

During hearings, Poddar Developers repeatedly sought adjournments, while STCI Finance did not oppose these delays, allowing the case timeline to stretch without visible recovery pressure or interim asset protection.

In 2025, despite documentary proof and Poddar’s acknowledgment of default, STCI abruptly informed the NCLT that settlement talks were “reaching finality,” seeking withdrawal of the insolvency petition.

On 3 July 2025, the NCLT permitted withdrawal, despite no signed settlement agreement on record, raising red flags about intent, propriety, and the safeguarding of public sector claims.

Unanswered Questions on Settlement and Corporate Disclosures

To date, neither STCI Finance nor Poddar Developers has disclosed whether any settlement was concluded, or the financial terms governing repayment, waiver, or restructuring of the ₹80 crore exposure.

Poddar Developers has also failed to upload its 2024–25 annual report or confirm whether an Annual General Meeting was conducted, deepening concerns about corporate governance and statutory compliance.

Such opacity undermines creditor confidence, minority stakeholder rights, and the Insolvency Code’s core objective of time-bound, transparent resolution of financial distress.

Read more: Nearly 20000 take out march in Palghar against Vadhavan port.

Read more: STCI Finance Retreats—Is Poddar Housing Really Safe Now?

Mortgage of Trust Property Without Consent Raises Legal Alarms

A more troubling dimension emerges from the loan security structure underlying the STCI exposure to Poddar Housing, involving land legally owned by a charitable trust.

Poddar’s disclosures state that STCI held an exclusive mortgage charge over project development rights, present and future structures, transferable development rights, and all project receivables.

This implies STCI accepted trust-owned property as collateral without consent from the Trust, the Charity Commissioner, or apparent verification of title authority, reflecting alarming due diligence failures.

Despite written warnings and Charity Commissioner rulings shared by the Trust, STCI reportedly contested the Trust’s claims instead of freezing accounts or seeking borrower clarification.

Impact on Flat Buyers and Consumer Protection Failures

For homebuyers who booked apartments in the Poddar project, the consequences are severe and potentially irreversible under current legal arrangements.

All present and future assets, including buildings and receivables, already stand pledged to STCI, meaning buyers may lack legal ownership even after full payment.

Refunds or compensation claims are equally constrained, as future earnings remain encumbered, exposing buyers to the risk of paying for assets the developer never lawfully controlled.

Call for ED and EOW Probe Amid Regulatory Silence

Observers estimate the broader financial exposure linked to Poddar projects could exceed ₹2,000 crore, with alleged regulatory inaction crossing from negligence into possible active collusion.

The Charity Commissioner’s unexplained inaction, despite clear jurisdiction over trust property, has emerged as a critical failure point in protecting public and charitable assets.

Collectively, these facts support an urgent, independent investigation by the Enforcement Directorate and Economic Offences Wing into possible criminal conspiracy, money laundering, and abuse of public funds.

Whether authorities act decisively may determine not only accountability in this case, but public confidence in India’s insolvency, banking, and real estate oversight framework.

Investigative Commitment by Unmesh Gujarathi and Sprouts News

Unmesh Gujarathi, an investigative journalist, has closely investigated this alleged scam with facts, documents, and public interest at the core. Sprouts News consistently stands with its readers, firmly opposing injustice, corruption, irregularities, and abuse of power. If you are facing wrongdoing, harassment, or unfair practices, feel free to reach out to Sprouts News without hesitation.