Homebuyers evaluating options, as the first housing company faces insolvency proceedings

The introduction of insolvent code is a ray of hope for the millions of home buyers who put their entire life’s savings into these homes and get nothing but empty promises in return.

“Hard earned money of home buyers will not be allowed to go down the drain”, said Noida CEO Amit Mohan Prasad. They barged into the company’s office on Saturday and raised slogans against the government and the builder.

The approval has to be taken over possession of unsold property of the defaulting builders. “The government is there for them to take care of their interests as per law”, said Prasad.

Jaypee Infratech has 2500 hectares of land in five parcels of around 500 hectares each.

Jaypee Infratech has become one of the first companies to be given a chance to clear all its debts under the provisions of the Insolvency and Bankruptcy code, 2016 and the Real Estate Regulation and Development Act, 2016 (RERA).

This move has caused huge anxiety among the home buyers whose number is said to be around 32,000.

Bankruptcy proceedings have also been initiated against other companies including Bhushan Steel, Bhushan Steel & Power Ltd, Electrosteel Steel and Lanco Infratech, Alok Industries and Jyoti Structures, which are among the 12 major non-performing asset (NPA) or bad loan cases identified by the Reserve Bank of India (RBI).

Khan alleged that the builder is deliberately getting the company declared bankrupt in league with the bank and a CBI probe should be held into this.

On August 9, the Allahabad bench of NCLT admitted the petition filed by IDBI Bank under Section 7 of Insolvency and Bankruptcy Code 2016. The Noida authority has however promised buyers that their investment is safe.

As per the order, Jaypee Infratech has defaulted on Rs 526.11 crore loan outstanding to IDBI.

The NCLT Bench accepted the petition moved by IDBI Bank, the leader of the consortium of lenders to the firm, and also approved the appointment of Anuj Jain as an interim resolution professional.

This plan requires an infusion of around Rs 1,000 crore for completion of the housing projects, he added. Jaypee group has been selling its assets to reduce debt. The two projects have been delayed by four to seven years.Buyers stopped their agitation around 4pm.