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What about the investments?

The Allahabad High Court ruling has left home buyers, builders and banks in a fix in the three villages where the court has ordered land to be returned to the farmers.

delhi Updated: Oct 22, 2011 01:40 IST
HT Correspondent

The Allahabad High Court ruling has left home buyers, builders and banks in a fix in the three villages where the court has ordered land to be returned to the farmers.

While buyers are left with a burden to repay loans, developers will seek a refund of the money paid to the state government for the land in these three villages.

On the other hand, there are banks that have funded the projects and also given home loans.

Will you get your down payment back?

The court has ordered builders to return the land. Developers should ideally refund the down payment amount to customers.

Real estate experts, however, say that builders may offer buyers flats in their other projects. In other cases, they may refund the money but that may not be the full amount.

What about home loans?

A banker said that as per the process, they will first go to the customers for loan recovery but since they have not committed any fraud, they won’t force to recall the loans.

The bank will take a look at its total exposure in the case and take a collective call after discussions with the Reserve Bank of India (RBI) for the unrecovered amount.

He, however, added these won’t be treated as non-performing assets (NPA) in their books of accounts.


What about construction loan given to builders?

A banker said loans to builders are limited to construction and that banks do not lend for land purchase.

Another banker added it is natural that banks will stop future disbursements and assess the quantum of exposure in the area.

They will first approach the builder to recover the loan. He said talks will be held with the RBI.