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Jaypee homebuyers anxious, have to pay EMIs but fate of flats uncertain

The investment of around 30,000 homebuyers is stuck because of insolvency proceedings against Jaypee Infratech. No new purchases can happen nor buyers can sell, transfer or get possession of their ready to move in or under construction flats.

noida Updated: Aug 16, 2017 13:05 IST
Vinod Rajput
Vinod Rajput
Hindustan Times
Jaypee builders,Jaypee insolvency,Jaypee homebuyers
Hundreds of homebuyers assemble at Sector 15 A park to protest against Jaypee builders in Noida. The investment of around 30,000 homebuyers is stuck because of insolvency proceedings against Jaypee Infratech.(Sunil Ghosh/HT Photo)

The investment of around 30,000 homebuyers is stuck because of insolvency proceedings against Jaypee Infratech.

No new purchases can happen nor buyers can sell, transfer or get possession of their ready to move in or under construction flats. Also there will be a status quo on the execution of registry of a property because the interim resolution professional has taken control of the Jaypee Infratech — realty arm of the Jaypee Group.

According to an interim resolution professional of a nationalised bank, future of flats of homebuyers and their investment is uncertain because a committee consisting of financers will later decide what should happen with the housing projects. Homebuyers are worried and confused as they do not know whether they will get their flat or investment back along with the interest once the insolvency proceedings are over.

“During this period, when the insolvency proceedings are underway, interim resolution professional that took over control cannot allow transactions in the assets of Jaypee Infratech as per law. It means without the consent of the IRP (Interim Resolution Professional), homebuyers cannot either exit or move into a ready flat nor get registry executed. Homebuyers, whose investment is stuck have no other option but to wait till Jaypee Infratech’s IRP files his resolution report,” said the IRP, on the condition of anonymity.

The Allahabad bench of national company law tribunal (NCLT) has appointed Anuj Jain, a chartered accountant, as IRP under Insolvency and Bankruptcy Code, after admitting an insolvency plea from IDBI on August 9. Jain has taken over the Jaypee Infratech management.

Jaypee Infratech, through a public notice, assured homebuyers not to panic. The builder, IRP and the Noida authority jointly through a press release assured that their investments are safe.

Buyers, however, are in a panic mode. “There is no one from the government to help the homebuyers. Why should I take leave and file claim? Why cannot the government ensure all those, who invested in the projects, that they will either get refund along with interest or get the flat? Why the government has no responsibility if the builder fails,” said Rajiv Singh, a Jaypee buyer.

Legal experts advised that filing claims is crucial to influence the NCLT decision.

“Those (buyers), who will file claims will become members in a committee which will be formed once the resolution report will be ready. The majority (75% members) in that committee will decide whether to accept the IRP resolution or suggest other options for revival of the Jaypee Infratech. Those, who will not file claims have no right to be part of the committee. The committee’s view and resolution report will be submitted to the NCLT for a final decision,” said the IRP.

Both, IRP and the committee members, if they agree can invite any other private or government entity that can take over the project and deliver. IRP has six months time to prepare resolution report. NCLT can extend this period by three months.

“Homebuyers will have to wait until this process gets over. IRP and the committee will propose whether they want to sell assets for revival or introduce any other player to take over,” said Pawan Chaturvedi, a lawyer with Delhi high court who deals with insolvency and real estate cases.

However, Noida authority chief executive officer (CEO) Amit Mohan Prasad reassured homebuyers. “Homebuyers investments are safe and they do not need to panic at all. The construction of Jaypee Infratech projects will continue as it is unaffected by the insolvency proceedings. The government is taking all required steps to ensure that buyers investment is safe,” said Prasad, after meeting with IRP, Jaypee Group managing director Manoj Gaur and IDBI Bank.

First Published: Aug 15, 2017 23:38 IST