SC NOTICE TO CENTRE, RBI ON PLEA FOR REAL ESTATE BAILOUT

nNEWDELHI: The real estate industry will collapse and there will be a financial massacre if adequate measures are not taken to bail out the sector which has been on a downward spiral due to the Covid-19 lockdown and the economic slowdown, a petition filed before the Supreme Court on June 11 claimed.

The petitioner, Credai-mchi, an association of over 1,400 real estate developers in Mumbai Metropolitan Region, approached the top court seeking a relief package for the ailing real estate sector contending that the sector was discriminated against by the government since it was not allowed to operate during the lockdown while many other sectors were allowed to function.

“Considering the economy where there are virtually no takers of a real estate project because of issues which the sector was already facing and ones which have emanated due to the virus and lockdown the stressed assets market would collapse resulting in opportunists and hostile takeovers. Inadequate or no measures to bailout the sector would result in the financial massacre,” it was submitted.

A bench of justices Ashok Bhushan and V Ramasubramanian issued notice to the central government and the RBI on Friday. Senior Counsel Kapil Sibal and advocate Kunal Vajani instructed by law firm DSK Legal represented the petitioner.

The petitioner prayed for reliefs including waiver of interest during moratorium period, one-time restructuring, immediate passing of benefits of reduction in repo rates and extension of loan tenures in respect of deferred installments.

The petitioner submitted that there was an absolute prohibition on the right of real estate companies to carry on their business and all means to generate revenue were brought to a standstill by the March 25 lockdown.