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LIC HFL Trying To Recover Defaulted Loans Worth Rs 340 Crore from Ex-MP's Properties
LIC HFL, one of India’s leading housing finance companies, has set out on yet another attempt to recover dues worth Rs. 340 Crores from Butta Infrastructure Private Limited. Scheduled for August 25, 2025, this latest effort underscores LICHFL's determined approach to recovering outstanding dues totalling Rs 340 crores, plus accrued interest, from loans that were defaulted upon after being transferred to the company.
The loan was sanctioned in 2018, when former MP, Butta Renuka and her husband, Neelakanta Shiva Butta, served as Directors of the company. Properties owned by the ex-MP and her family in Banjara Hills, Hyderabad and other locations were mortgaged for the same.
According to reports and NCLT documents, the borrowers initially paid instalments amounting to Rs 40 crore but have defaulted for the past five years, leading to the current dues of Rs 340 crore. LICHFL approached the National Company Law Tribunal (NCLT) after repayment discussions, including proposals for loan restructuring or partial asset sales, did not align with regulatory norms. The NCLT has been overseeing related proceedings, including the liquidation of Butta Infrastructure Private Limited, since February 2022.
The investigations by NCLT as per published reports, found that the lease agreements used to secure the loans were unenforceable due to pre-existing, uncancelled leases with other parties. Further, a tenant testified before the NCLT that letters purportedly signed by a Mr. Rama Rao—instructing rent deposits to the loan authority—were forged, as no such individual had ever been employed by the organisation. These revelations highlighted potential fraud and abuse of power, complicating the recovery. However, there is no update regarding a case being pursued on these points.
The 13th Auction is scheduled for 25th August as per a notification published in newspapers, and has a reduced reserve price of Rs 71 crores to attract bidders.
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