Amrapali Silicon City buyers may challenge insolvency order in SC
The NCLT on Monday accepted Bank of Baroda’s insolvency plea against Amrapali Silicon City in Sector 76, Noida. The bank initiated the process for an outstanding amount of Rs 56 crore.Updated: Sep 06, 2017 12:00 IST
The Noida authority and the homebuyers of Amrapali Silicon City may challenge the order of the National Company Law Tribunal (NCLT) of initiating insolvency proceedings against the fund-starved builder in the Supreme Court.
The NCLT on Monday accepted Bank of Baroda’s insolvency plea against Amrapali Silicon City in Sector 76, Noida. The bank initiated the process for an outstanding amount of Rs 56 crore.
The move caused panic among homebuyers as according to them their investment will not be protected under insolvency and bankruptcy code because NCLT gives preference to financial creditors (banks) before buyers.
“We are discussing the issue with our lawyers and other homebuyers to decide future course of action. We will take all necessary legal steps that safeguard our rights. We are contemplating to file a plea in the Supreme Court through residents’ association,” said TS Verma, vice-president of Amrapali Silicon City social welfare association.
The Silicon City project is spread over 1,76,758 square metres and has around 5,000 flats, which were supposed to be completed by 2013-end. But the builder is yet to complete civil work on seven towers. It has completed civil work on 21 towers and around 1,000 buyers have moved into unfinished flats.
“We have been suffering for the last seven years because the Amrapali Group offered possession into incomplete housing project. We do not have a community centre, green area and other facilities. The builder has not even constructed boundary wall around our housing project. And now we have to fight a long legal battle,” said AK Wahi, president of Amrapali Silicon City social welfare association.
The company — which has not just delayed delivery but is unable to clear Rs550 crore dues with the Noida Authority too — is facing a default of Rs 155 crore against banks. Apart from BoB, Oriental Bank of Commerce (OBC) and Bank of Maharashtra (BoM) are the other lenders and did not give their consent to BoB to approach the NCLT. The Noida Authority had also opposed the initiation of insolvency resolution process.
To recover it dues, the authority may move the Supreme Court to demand a stay on NCLT order.
“Our first priority is to ensure that the interest of homebuyers is safe. We will take a legal step that ensures homebuyers’ investment is protected. After that we will try to recover our Rs500 crore from the Amrapali Group. We will seek legal opinion and do whatever saves the interest of buyers and our debt. If going to the Supreme Court protects buyers and our interest then we may follow that step,” said Amit Mohan Prasad, chief executive officer of the Noida authority.
However, Amrapali Group director assured that the investments of its buyers is safe.
“We had obtained Rs55 crore loan from all the three banks for the project. But the homebuyers should not worry because we have adequate assets to revive the project. We have 48,000 square meters housing land in Silicon City project worth Rs600 crore. Therefore, we will be able to finish this project without any problem. Buyers should support us,” said Shiv Priya, director of the Amrapali Group.