DLF Exits ₹10,000 Crore Mumbai Project After ₹800 Crore Settlement with Hubtown

Real estate industry sources revealed that leading developers Hubtown and DLF have resolved their prolonged legal dispute concerning one of south Mumbai's most prestigious redevelopment initiatives. The settlement, involving an ₹800 crore payment arrangement, has effectively concluded years of litigation surrounding the 17-acre Tulsiwadi urban renewal project valued at over ₹10,000 crore.

Settlement Terms Lead to DLF's Complete Exit

Industry insiders confirmed that DLF has formally withdrawn all litigations against multiple parties including Hubtown, Twenty-Five Downtown Realty (previously known as Joyous Housing), and PNB Housing Finance under consent terms agreed upon in the previous week. The settlement arrangement requires Twenty-Five Downtown, an entity connected to Hubtown, to transfer ₹800 crore to DLF over a two-year period, with ₹100 crore already disbursed as the initial installment.

Security Arrangements and Documentation

As part of the comprehensive settlement agreement, documentation registered last week indicates that Hubtown has pledged 150,000 square feet of space within the proposed development as collateral for the remaining ₹700 crore payment obligation. The strategic Tulsiwadi project, situated adjacent to the Willingdon Club in Tardeo, can now proceed without the legal impediments that had previously stalled its progress.

Background of the Complex Partnership Structure

The original partnership arrangement involved DLF holding a 37.5% stake alongside Shapoorji Pallonji Group's Chinsha Property with an identical shareholding in the Special Purpose Vehicle established for the Tulsiwadi slum cluster redevelopment. Hubtown maintained the remaining 25% ownership in the venture.

Financial Crisis and Loan Default Trigger Legal Disputes

The ambitious redevelopment initiative encountered significant challenges when a ₹900-crore financing facility from PNB Housing Finance became non-performing in 2021. Following the loan default, PNB Housing Finance exercised its rights over pledged shares belonging to both Chinsha and DLF, subsequently disposing of these securities to recover its outstanding exposure. The loan portfolio was later transferred to Omkara Asset Reconstruction Company.

Shareholder Rights Violations Alleged

The share transfer process and pledge enforcement actions prompted serious allegations from the original stakeholders, particularly DLF, who claimed wrongful exclusion from the project and violations of fundamental shareholder rights. These disputes formed the basis of the extensive litigation that has now been resolved through the current settlement arrangement.

Impact on Mumbai's Redevelopment Landscape

This resolution represents a significant development in Mumbai's redevelopment boom sector, where complex partnership structures and financing arrangements often lead to prolonged legal disputes. The settlement allows the Tulsiwadi project to move forward under Hubtown's leadership, potentially setting a precedent for resolving similar conflicts in the future.

While DLF had earlier announced entry into Mumbai through various projects, this exit from the Tulsiwadi development marks a strategic shift in the company's Mumbai market approach. The developer had previously indicated the settlement arrangement in regulatory filings, though specific financial details were not disclosed at that time.