GET Stock QuotesNews18 APP
News18 English
»
1-min read

Realtors’ Insolvency: Home Buyers Must Get Their Flats, Says Jaitley

Jaitley's comments will come as a relief to lakhs of home buyers who have been left in the lurch as the government cracks the whip on loan defaulters, including many real estate companies.

Tushar Dhara | News18.com

Updated:August 16, 2017, 5:03 PM IST
facebookTwittergoogleskypewhatsapp
Realtors’ Insolvency: Home Buyers Must Get Their Flats, Says Jaitley
File photo of Union Finance Minister Arun Jaitley. (Photo: Reuters)
New Delhi: Flat buyers who have paid money to real estate developers whose companies are now facing bankruptcy proceedings should get their flats, finance minister Arun Jaitley said at a press briefing on Wednesday.

Jaitley said the government understands the position of the buyers. His comments will come as a relief to lakhs of home buyers who have been left in the lurch as the government cracks the whip on loan defaulters, including many real estate companies, which are facing bankruptcy proceedings. The latest is Jaypee Infratech Ltd. which has many unfinished development projects in Noida.

The mounting non-performing assets problem at Indian banks is being tackled with fresh urgency as the government and the Reserve Bank of India try and recover as much of the Rs 7 lakh crore of bad loans from hundreds of infrastructure, real estate, power and steel firms.

The government passed the Insolvency and Bankruptcy Code last year and gave the Reserve Bank of India more legal firepower to enable recovery of bad loans from the corporate sector. When the National Company Law Tribunal gives clearance a company enters bankruptcy proceedings, where it is given 180 days to work out a clear plan of repayment. An interim resolution professional is appointed to help formulate the plan.

Anuj Jain, the IRP for Jaypee Infra, in a note posted on Jaypee’s website said that he will prepare a list of creditors and their claims, including flat owners.

However, Rajesh Panayanthatta, an advocate and insolvency professional, wrote in Live Law that, “The ‘locus standi’ of the flat buyers for initiating Insolvency Resolution Process against the defaulting Real Estate Developer Companies is a grey area”.

“This is because under the Bankruptcy law a financial, operational creditor or corporate debtor can initiate insolvency resolution process. But whether a flat purchaser who invested his hard earned money for purchasing residential/ commercial flats would come in any of the above category, is still not attained finality by any of the judicial pronouncements”.

Also Watch

| Edited by: Aakarshuk Sarna
Read full article
Next Story
Next Story
facebookTwittergoogleskypewhatsapp