Amrapali homebuyers move Supreme Court against insolvency proceedings
The case comes close on the heels of the top court restraining the NCLT from hearing insolvency proceedings against Jaypee after investors rushed to it for safeguarding their interest.delhi Updated: Sep 20, 2017 22:22 IST
Hassled homebuyers who had invested in Amrapali Group projects moved the Supreme Court on Wednesday against the insolvency proceedings initiated against the real estate firm.
The petition, filed by Bikram Chatterjee and 106 others, says the company has neither given them possession of flats nor returned their “hard-earned” money spent to book homes in the Amrapali Centurion Park-Low Rise project, Amrapali Centurion Park-Terrace Homes and Amrapali Centurion Park-Tropical Garden at Greater Noida in Uttar Pradesh.
Proceedings before the National Company Law Tribunal (NCLT) has left the investors in a lurch as they would not be treated as secured creditors such as the banks and financial institutions. The petitioners’ advocate ML Lahoty said the buyers want the court to safeguard their interest.
The case comes close on the heels of the top court restraining the NCLT from hearing insolvency proceedings against Jaypee after investors rushed to it for safeguarding their interest.
The bench headed by Chief Justice Dipak Misra has asked the NCLT-appointed Interim Resolution Professional (IRP) to submit a proposal on how can to secure the interest of flat-buyers, who claim they have been pushed last in the line of creditors.
More than 5,000 flats were to be built in approximately 40 towers in a phased manner by the group.
On September 4, the NCLT had passed order on a plea of Bank of Baroda seeking initiation of insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 against Amrapali Silicon City Private Limited.
Under the new insolvency law, consumer and recovery cases and decrees passed by civil courts and consumer fora in favour of homebuyers against real estate firms cannot be executed.
Lahoty told HT: “Homebuyers should be treated equally with banks and FIs or the provisions of the bankruptcy code, which give priority to lending institutions, be held ultra vires.”
Petitioners claimed the company made them to sign “one-sided” allotment agreements, alleging they were “oppressive and unreasonable” as there was a clause for timely payment by the buyer but no mention about a deadline to complete the project.
The agreement allowed the builder to raise loan from any bank by way of mortgage of the flats being sold and buyers cannot object.
The petitioners made the Union Ministries of Finance and Corporate Affairs, Uttar Pradesh government, Bank of Baroda and the RBI as respondents in the case. They want IRP to be restrained from creating any third party interest in the projects in question.