30k buyers stuck, can’t sell or move into flats

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

No new purchases can happen nor can buyers 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 decide what should happen with the housing projects.

“During this period, when the insolvency proceedings are underway, interim resolution professional who 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 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 homebuyer.

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 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 a 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 the assets or introduce any other player to take over,” said Pawan Chaturvedi, a lawyer.

However, Noida authority CEO Amit Mohan Prasad reassured homebuyers. “Homebuyers investments are safe and they do not need to panic at all. The government is taking steps to ensure that buyers investment is safe,” said Prasad.

JAYPEE INFRATECH ASSURED HOMEBUYERS NOT TO PANIC AND TOLD THEM THAT THEIR INVESTMENTS ARE SAFE