Developers seek protection from insolvency for a year

NOIDA: Real estate developers on Tuesday demanded protection from insolvency proceedings for at least a year as the sector had been severely hit financially due to the pandemic.

They also wrote to the Centre and the Uttar Pradesh Real Estate Regulatory Authority (Up-rera) seeking more time to repay loans.

“Section 7 of Indian Bankruptcy Code (IBC) allows a financial creditor to file for initiating the corporate insolvency resolution process against a corporate debtor. Section 9 provides for application of insolvency by an operational creditor, while Section 10 is for initiation of insolvency proceedings by a corporate applicant. We have requested that applicability of these three sections be suspended for a year like it was done in 2020 in view of the Covid-19 pandemic,” said RK Arora, Uttar Pradesh president of the National Real Estate Development Council.

Last year’s relief expired on March 31, 2021.

“We request the Up-rera and the government of India to extend this relief further because the second wave of Covid-19 has further ruined the business with most of our sales staff, construction workers and others falling ill and projects getting affected. Besides, we request a moratorium of one year on business loans in view of the pandemic,” said Arora.

There are at least 600 ongoing realty projects in Gautam Budh Nagar district that consists of Noida, Greater Noida and Yamuna Expressway areas.

As per the Confederation of Real Estate Developers Association of India (Credai), a builders’ lobbying body, an investment of ₹50,000 crore is at stake in these projects.

“The real estate sector saw the worst phase in terms of sales and construction in 2020, when first Covid wave arrived halting work at project sites. As the sentiment began to revive in the market, the second wave struck and further deteriorated the sector and forcing a liquidity crisis,” said Prashant Kumar Tiwari, president of Western UP Credai.

The Up-rera will look into all these issues in its meeting next week.

“We are going to consider their (developer’s) proposal next week in authority meeting and take appropriate action in this regard,” said Balvinder Kumar, Up-rera member.

REALTORS HAVE ALSO WRITTEN TO THE CENTRE AND THE UP-RERA SEEKING MORE TIME TO REPAY THEIR LOANS