Institutional sources, confirming the move, said they were "close to a decision on taking part-possession of the Bara Hindu Rao property". They added that HDFC has been appointed as the valuers for the property and the valuation process will soon be undertaken.

The estimated market price for the land and the residential-cum-commercial complex that DCM has planned is estimated at Rs 1,165 crore.

DCM Estates deputy managing director Sumant Bharat Ram said that no such deal is being planned. "No such deal is being envisaged either with UTI or ICICI in DCM Estates, especially in lieu of outstanding debt." DCM, the institutional sources said, owed UTI around Rs 130 crore, while another Rs 60 crore is oustandingwith ICICI.

"We do get queries from institutions for the purchase of their housing requirements for officers from time to time, all of which is dependent on DCM's ability to deliver the flats," Bharat Ram added.

Bara Hindu Rao comprises 67 acres of prime property in the heart of Delhi on which DCM Estates is developing a residential-cum-commercial complex.

Bharat Ram said that as far as his knowledge went neither HDFC nor any other institution was "currently involved in any valuation of DCM property for itself or on behalf of the institutions."

On the contrary, DCM, or its nominees, were planning to complete the project on their own to ensure quick delivery to numerous direct or indirect customers, he added.

The institutions, however, point out that they are increasingly trying to convert their loan dues into real assets. "Since the non-performing asset (NPA) norms have been made more stringent and there is a half-yearly stocktaking of outstandings, the institutions are increasingly converting theiroutstandings from companies into fixed assets by swapping debts with real estate."

"And since property prices are falling, companies prefer to swap real estate in lieu of their outstandings," they added.

Bharat Ram says he has been approached by the institutions for the purchase of residential accommodation at the Bara Hindu Rao property, and not for swapping of debt for fixed assets. According to him, institutions like GIC, LIC, UTI and ICICI were earlier looking at the Bara Hindu Rao property in Delhi for group housing projects for their employees. But since the company could not match the delivery time, the plans were dropped.

DCM had a contract with real estate developers Kailash Nath & Associates (KNA) and Ansal Properties & Industries to develop a Rs 1,165 crore residential-cum-commercial complex over 67.03 acres in the Bara Hindu property. But due to some disagreements about sharing the cost of construction, the entire property is now expected to be developed and sold by DCM Estates &Infrastructure.

DCM Estates & Infrastructure is a closely-held company of the DCM group, in which the group, through DCM Ltd, chairman Vinay Bharat Ram and some private holding companies holds in excess of 65 per cent stake. Singapore-based Tiara Holdings holds around 33 per cent stake.