Jaypee Infratech case: Yogi Adityanath govt holds out hope, backs homebuyers

Homebuyers of Jaypee Infratech Group have sought Yogi Adityanath government’s intervention after the National Company Law Tribunal admitted an IDBI Bank’s insolvency plea against the real estate company last week.

The Uttar Pradesh government gave hope on Wednesday to hundreds of distressed homebuyers of the Jaypee Infratech Group, promising to help the people get possession of their houses on time.

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. (HT file)

The homebuyers, most of whom have invested their life’s savings, have sought the government’s intervention after the National Company Law Tribunal admitted an IDBI Bank’s insolvency plea against the real estate company last week.

“We are on the buyers’ side and will do everything to see that they get possession of their flats on time as promised to them by the developer,” chief secretary Rajive Kumar said.

He said the company had submitted to local authorities a phased time-bound plan for handing the flats.

“If the company honestly follows the plan, the government will extend all help to it,” Kumar said.

“But if we find the company willfully delaying giving possession to the buyers, then legal action, including one under RERA provisions, will follow,” he warned.

Sources said the company has yet to build and give around 20,000 flats to the buyers, who had invested lakhs of rupees to book houses in Jaypee Infratech’s projects, including Wish Town in Noida and Greater Noida.

The government’s assurance notwithstanding, the buyers still have reasons to worry.

At least two banks that funded the housing projects have approached the tribunal requesting confiscation of company assets, sources said.

“If the tribunal agrees to liquidate assets to refund bank loans, the company will go bankrupt and have no funds to complete its ongoing projects,” one of the sources said.

The government could seek legal advice about this aspect.

At a meeting in Noida on Tuesday, the homebuyers decided legal and political action as the company teetered on the brink of bankruptcy.

Many people want their money refunded amid growing fears that lawsuits will become ineffective if the company is declared insolvent.

The real estate sector has been suffering a slump, especially after the government scrapped high-value banknotes in a blitz against black money and corruption. This largely unregulated sector in India is often accused of hitching its fortunes to illicit funds.

A landmark real estate law, called RERA and designed to protect homebuyers facing harassment because of limited legal options at times of dispute, hold out hope to clean up system. But its implementation is delayed because of various reasons.

“The problem is that even the law has turned against us. They have recognised private banks as bigger creditors than homebuyers, which is unjust because we have a larger share. Now the fight is not just against Jaypee but the banks and the law itself,” said Krishna Mitroo, an army veteran and a homebuyer who attended the Noida meeting.

(With inputs from HTC Noida)