Following in the footsteps of Jaypee Infratech homebuyers, buyers of Amrapali’s Silicon City project are now planning to move the Supreme Court after the National Company Law Tribunal (NCLT) bench in Delhi ordered initiation of insolvency proceedings against the company on a plea by Bank of Baroda last week.
“We have no other option… We are in touch with some lawyers and very soon we will be filing a petition in the Supreme Court,” Surendra Jain, vice-president of Amrapali Silicon City Flat Owners Welfare Society, said.
The tribunal has appointed Rajesh Samson of Deloitte as the interim resolution professional (IRP) in this case. The IRP will invite claims from creditors to the company and prepare a resolution plan within the time frame stipulated under the Insolvency and Bankruptcy Code, 2016 (IBC).
In this project alone, the realtor has an outstanding due of `56 crore as the principal amount only to Bank of Baroda. Other lenders to the realtor are Oriental Bank of Commerce and Bank of Maharashtra. In total, the realtor has to pay back Rs 156 crore to the banks for the project. Over and above this, it owes Noida Authority Rs 550 crore. JP Morgan gave it a credit of `150 crore as well.
Bank of Baroda has initiated insolvency proceedings against the realtor as it had allegedly not paid dues to the bank for more than a year.
The panic over the situation comes from the fact that under the Insolvency Code, once the resolution and liquidation process is completed, a portion of the proceeds goes towards recovering liquidation costs. It is followed by the payments to workers, employees and the banks and financial institutions involved in the projects, after which the government dues are settled. It is only then the homebuyers are taken into consideration. “We are not stakeholders in the insolvency process, we will be nowhere in the event of the company going into liquidation,” Jain said.
The homebuyers want that they should be made secured creditors under the Insolvency Code. “Also, when the code is under process, the homebuyers are not allowed to approach consumer courts. We should be allowed to approach consumer courts with our grievances, and we should be treated under the same category as secured creditors” he added.
The Silicon City project is spread over 1,76,758 square metre 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. Now, IRP will look after the maintenance of this project.