Pan-India homebuyers’ pressure group Fight For RERA has urged the government to amend the provisions of the Insolvency and Bankruptcy Code, 2016 and give first priority to homebuyers in settling their dues by completion of project or refund with interest.
“For this, it is also necessary that the Insolvency Resolution Professional are given powers to bring into insolvency proceedings other companies under same management including attaching the personal wealth of promoters since it is expected that the company under insolvency proceedings may be drastically asset negative,”Abhay Upadhyay, national convenor of Fight For RERA, said in a letter to Prime Minister Narendra Modi.
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 government dues are settled. It is only then that the homebuyers are taken into consideration.
Hundreds of homebuyers were left in the lurch after the Allahabad bench of the NCLT, on August 10, admitted IDBI Bank’s plea for initiating insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526-crore loan.
Last month, homebuyers who had invested in Jaypee Infratech’s projects had challenged the insolvency proceedings against the company in the NCLT before the apex court. On Monday, the Supreme Court ordered a stay on the order by the Allahabad bench of the NCLT, initiating insolvency proceedings against the real estate company. A day after the apex court stayed the order, IDBI Bank moved the Supreme Court seeking restoration of insolvency proceedings against Jaypee Infratech.
By Surbhi Prasad