Noida Authority has canceled the lease deed of a plot connected with Amrapali Group and sealed it and took possession of the property. Noida Authority had issued a show-cause notice 10 days ago to the Navodaya Properties Pvt. Ltd who is the owner of the plot.This action was taken after Corporation Bank was kept this property for the auction. The company has arrears of Rs 9.10 crore of the Corporation Bank on this property.
The authority argues that the property is on leasehold, so before the auction, both the bank and the owner should have obtained permission from the Noida Authority. Officials said that the bank has no right over this property but Noida Authority has the first right on this property which has been given clearly in Lease Deed. The Noida Authority officials’ team reached at Plot no -37, Block C-56 Noida Sector 62 andsealed it. An official told that the proceedings were completed till midnight and on Friday it has been given notice that we have occupied the property.
Meanwhile, the auction to be held on Friday has been stopped. The Corporation Bank officials said that we are taking legal advice in this matter as we have to recover Rs 9.10 crore. The plot was transferred to the office in the name of Navodaya Properties of Kabir Overseas on March 1, 2007,. In this building, the Amrapali Group is having its own office which is also parental institution of Navodaya Properties. On March 14, 2011, the Amrapali Group took a loan from CorportaionBnak in the name of Ultra Home Construction Pvt. Ltd. against this property.
Finance Minister Mr. ArunJaitley has commented on people trapped in a property in Noida. Mr. ArunJaitley has said that the government has full sympathy with the buyers of property in Noida and such people can also appeal for relief under Bankruptcy Act. The Allahabad bench of National Company Law Tribunal (NCLT) filed a petition for IDBI’s petition in the loan case of 526 crore rupees against JP Infratech last week.
This has created uncertainty in front of thousands of people who have booked flat in Jaypee. NCLT appointed Mr Anuj Jain (IRP) to pursue the interim disposal process under the Bankruptcy and refining Inefficiency Code. MrJaitley said that the people who have given money to the developers should get their flat. The Finance Minister said that we have full sympathy with the buyers of the house. He said that there is also a provision for the continuation of the company’s business under the Code of Diva.
After the Union Cabinet meeting, MrJaitley said on the question raised on the problems faced by flat buyers of Noida, “Those who are upset can go for relief under the law.” If such a move happens then the entire sympathy of the government will be with those who have given money to book the flat. JaypeeInfratech, the Jaypee Group’s company, which is burdened with debt, has defaulted in paying a loan of IDBI’s Rs 526.11 crore. This company involves in road construction business and real estate sector. This company has built Yamuna Expressway connecting Delhi with Agra.
After the declaration of JP Group’s company JP Infratech’s bankruptcy, there is news of relief for troubled flat buyers. In view of the confusion in filling the Insolvency Resolutions form, the Insolvency Resolutions Professional of the company has decided that if the buyers fill another form instead of the required form for claim, the claim will be considered valid and the form will not be canceled.
According to the existing law, financial credentials (bank) and operational creditors have to fill different forms in order to file an Insolvency petition. But any creditor claim is free to register. Therefore, those who buy the house in JP Infratech do not have to worry about it. According to sources, the main reason for this confusion is the Insolvency and Bankruptcy Board, it did not have any idea that such a situation could also come. The forms which the board has to prepare for the claim, are for the company only.
One of the major reasons for confusion in this caseis NCLT and NCLAT also. In the context of a recent case, NCLT refused to accept the home buyer as an operational creditor. However, lawyers associated with this case say that this decision is still under consideration before the court. At the same time, in another case NCLAT had said that flat buyers who got fixed returns from the developers would come in the category of financial credits. However, the buyers of JP’s Infratech may not be in this category. Now as the Insolvency Resolutions Professional has no information regarding the fixed returns given by the company, so everyone has been given relief in filling the claim form.
Jaypee Infratech’s home buyers are facing unprecedented circumstances. For the first time a housing company has reached the threshold of bankruptcy. There is a very difficult situation for home buyers. If a steel company is bankrupt, then there is no impact on people directly, but when a real estate company bankrupt which is building houses then the situations become challenging, especially for buyers. This is the reason why the case of JP Infratech is quite serious because in this case different laws would be interpreting each other’s laws.
What should the home buyers of JP Infratechdo in such a situation?Let’s know what is the next way to them
DO CLAIM IN COMPANY LAW TRIBUNAL
The National Company Law Tribunal (NCLT) has appointed an Insolvency Professional on Thursday to see the process of bankruptcy. Buyers of JP Projects can claim till August 24. Insolvency Professional will ask for the claim in prescribed form in a day or two.
DO NOT STOP REPAYING EMI
If you have taken a loan from the bank and you are waiting for a home possession then you should not stop paying EMI. According to experts, Insolvencyprofessional will try to revive the company, so that the buyers will have some hope to some extent. withdrawing the EMI will not only increase the risk of credit rating of the buyers, but will also have to face difficulties during the bankruptcy process.
WHAT IS A REVIVAL PLAN?
Insolvency Professional has to make a reliable revival plan within 270 days for housing schemes. For this, they can also get 90 extra days of extension. The whole process of revival will be under the care of the court. Revival process is not as intuitive as other companies. This is because the thousands of buyers have invested in the company, so revival is very important for them. If the company does not improve the situation, its assets will be sold to repay its debt.
JP Infratech, among the country’s largest infrastructure companies, will soon be declared bankrupt. While hearing the IDBI bank’s petition, the Allahabad branch of the National Company Law Tribunal (NCLT) on Thursday has been included JP Infratechin the bankruptcy category. After the declaration of bankruptcy of JP Infratech, now, NCLT will give one of the 7 accounting companies to evaluate its assets which will give JP Infratech the prospect of repaying the loan with the lender.
FINANCIAL POSITION OF THE COMPANY WILL HAVE TO IMPROVE WITHIN 270 DAYS
In the debt of Rs 8,365 crore, the company will get the time of 270 days to improve its financial condition. In the meantime, if the financial condition of the company will not change, then its assets will be seized. This is a big setback for thousands of people who have invested in JP Group.
THE COMPANY HAS A LOAN OF 8 LAKH 35 CRORE
JP Infratech is one of the main big companies of Jaiprakash Associates. Jaiprakash Associates has a share of 71.64 per cent in this company. JP Group has a debt of about Rs. 8 thousand 35 crores, with the highest debt being made by IDBI bank. NCLT has given this verdict on the petition of the IDBI bank. The biggest hit of this decision lies on those who have purchased a property from JP Group and have not received delivery.
JP Group is making 5 townships in Gautam Buddha Nagar, Aligarh, Agra. These big projects are having plots for thousands offlats, pent-houses, individual plots, schools etc. Jaypee Group is constructing thousands of flats at Greater Noida along the Yamuna Expressway. JP Group had contracted for the construction of Yamuna Expressway which is costing 128.39 billion rupees. Apart from this, JP Builders has done all the major construction works which includes the racing track, cricket stadium in Greater Noida.
The Ministry of Housing and Urban Development has decided to appeal to the Supreme Court that all cases against Real Estate (Regulation and Development) Act filed in various High Courts should be put together so that they can be decided in one court. The petitions filed in different High Courts of the country to challenge the legal validity of RERA.
The housing and urban development ministry has proposed to the law ministry to transfer these petitions in the Supreme Court as the petitioners (builders and developers) have questioned the constitutional validity of the RRERA law. On Monday, the Pune Bench of the Bombay High Court was informed about this proposal. There are many such cases for hearing at both the Nagpur Bench and the Madhya Pradesh High Court.
The main objection of the builders is to bring all the under construction projects under RERA. They say that this would have a bad effect on them because these projects were started when there was no such law. In this case, this law is illegal. He has been opposing the interference of the central government by pointing out that the matters related to land comes under state government. They believe that the submission of the projects details to the regulator will result in the violation of theirrights of confidentiality.
The last date for the registration of all the under-construction and new projects under RERA is ended on Monday. However, if the law does not comply with the rules, a penalty has been made, yet it remains to be seen whether the state governments will take strong action or will give some relief in thinking that many of them have not appointed permanent regulators.
The government has launched RERA website but with the launching of this, the people is becoming more confused about RERA. An official of the central government says that RERA has been implemented in UP without any amendments. While some experts have said that on the basis of the minority difference between compliance certificates (CC) and occupancy certificate (OC) at the government level, the builder lobby along with some politicians has implemented the RERA Law which has been made in Akhilesh government. Because of this, many major projects in Noida and Greater Noida have been easily excluded from the RERA. The public now wants to clear the picture from the government about this. CREDAI has clarified that on the basis of the Occupancy Certificate, the projects will get conditional rebate from the RERA. However,in Maharashtra, the government willdecide the RERA implementation only on the basis of compliance certificate.
Mr Rajiv Ranjan Mishra, Joint Secretary of the Ministry of Housing and Urban Development and member of the RERA Draft Committee told, “it has come in the media that earlier there was a provision in RERA about the projects which did not get the compliance certificates included within the RERA.However, the state government changed the draft of the RERA on the basis of Occupancy Certificate instead of Compliance Certificate due to which many projects will not come under the RERA”
The government will give the Occupancy Certificate to the Towers of different projects which have electricity, lift or water and on this basis many projects cannot be come under RERA. At the same time, in any project, the club or park with all the facilities which thebuilder promise at the time of launching the project, are incomplete then that project cannot be given the Completion
The Central Government has been implemented the RERA from May 1, 2016, while the UP government has issued notification on May 1, 2017. The Government has made it clear that only after the notification, the provisions of the RERA in Uttar Pradesh will be applicable. It is quite clear that for the projects that have been applied for compliance on May 1, 2017, all of them will not come under the RERA.
The government has taken strict action against the Amrapali Group which is one of the big builder group of Noida-Greater Noida area.Amrapali’s head office has been sealed for not paying the Rs. 4 crore as labor cess. Apart from this, two officials of Amrapali have also been arrested. Hrithik Sinha is the son-in-law of Anil Sharma, CMD, Amrapali. Hrithik Sinha is also being called the CEO of the company. The other officer’s name is NishantMukul.
CM Yogi Adityanath gave strong warnings to builders during a program on Sunday. However, this action has been done by SDM Dadri. It is being told that there was a liability of around Rs 4 crores labor cessfor about one year on Amrapali. Despite all the notices, it has not been paid and that’s why the strict action is taken by SDM Dadri.
Both the officials of Amrapali were kept in the custody of the SDM Court. The court has sent both of them to 14 days in judicial custody. It is being told that such a tough action against a builder has happened for the first time. An FIR has also been registered against Amrapali CMD Anil Sharma for not giving the flat to the buyers in Greater Noida.
An attempt was made to contact the Amrapali officials regarding this action. At present, there is no available availability for the company to answer this matter. The District Labor Department of Noida has also issued RC against 7 other builders. The arrest of other builders may also occur in the days to come.
Uttar Pradesh’s Chief Minister Yogi Adityanath has warned real estate builders that if 1.5 lakh buyers do not give the flat soon, action will be taken against them. The Chief Minister said that at this time real estate businessmen face the challenge of meeting the trust. He said, “The state government has four months experience that there is a big problem between builders and buyers in the state.”
The chief minister said in the conference organized by the Confederation of Real Estate Developers Association of India (CREDAI), “One of the biggest crises of real estate sector is to leave the projects incomplete. This problem is coming out in Noida and Greater Noida. Nearly 1.5 lakh buyers are unable to get the house even after paying the money. This has created a crisis of credibility. On the efforts of the state government, some builders adopted a positive attitude and fixed the deadline for housing, while some builders are not taking any steps. The state government will have to take a tough step on the builders who are nottaking any positive steps through the dialogue. The government has an appeal that the “action against the builders status” should not arise.”
The Chief Minister said that the second major problem is the creation of unauthorized colonies. Colonies are made without the development of facilities like electricity, water, roads, sewer, drainage etc. by the developers. Later, these colonies are run by the corporation or development authority etc., for the development of these colonies. He said that the person coming to the basic infrastructure in the urban areas becomes victim of the disease and the blame comes to the government that he is not doing anything. However, the development of these unauthorized colonies requires a large amount of capital and such a situation must be stopped.
MrYogi said that keeping in view the objective of providing housing to all by Prime Minister Narendra Modi by 2022, the state government wants to build more and more houses. Under the PradhanmantriAwasYojana (Rural), there is a target to construct 10 lakh houses, out of which 6 lakh families have been identified and allocations have been made.
The Chief Minister said that the State Government has set a target to construct two lakh housesfor the Prime Minister’s Housing Scheme (Urban). Under this scheme Rs.1.5 lakhs are given by the Central Government and a sum of one lakh rupees, by the state government, amounting to Rs. 2.5 lakhs is given. MrYogi said that the state government has implemented the ‘RERA’ law of the central government in the state. Expressing happiness over the cooperation and support of the real estate sector in this decision of the state government, he said that this law has arranged online registration. Its portal will also be started on July 26.
Builders have moved to court to challenge a RERA, which is seeking to protect homebuyers, so that they can delay its implementation a week before a key deadline.
The real estate sector in India has been affected by the problems from the last many years and the most affected people in this case are the homebuyers who have already made significant payment but still waiting for the possession of their houses. In lieu of this, the Central Government has passed a law last year to regulate the sector and set up a RERA (Real Estate Regulatory Authority) so that any disputes in new, existing and incomplete project can resolve.
However, the two groups of builders have moved to high courts in Maharashtra and Madhya Pradesh to challenge the law against the old projects which are incomplete.
Thus, the courts from both the states have asked the central government to respond to the petitions, which argues about Section 3 (which says ongoing projects must be registered). Further, the group of builders have also challenged Section 59, which defines penalties for violations.
According to the sources of Housing and Urban affairs ministry who has steered the RERA law, the developers are becoming jittery due to the deadlineis endingto register the ongoing projectin a week and the Central Government is not in a mood to give anyextra time for the registration.
The Builders are moving court against Section 3 only to buy time. No one knows that what is averting the developers to register their project under RERA if there is a regulator in place. The government has cleared that Section 3 of the RERA Act has made purposely so that the builders complete their projects (whose possession date already gone) in the coming months.
Further, the study shows that approx. 5 lakhs homebuyers are still waiting for their home in National Capital Region (NCR) for which the developers promised to complete and give possession five years ago. Further, the number of homebuyers can be rise significantly if we take a whole country into consideration.