Insolvency Resolutions Professional (IRP) is going to start giving possession papers of flats to some investors of JP Infratech. Another relief thing for JP’s home buyers is that they will not be forced to fill the claim form, whose deadline ends on Thursday. These two decisions were taken on the advice of the Insolvency and Bankers Board of India appointed by the government. The Insolvency and Bankruptcy Board of India emphasized that home buyers should be allowed to fill out the claim form for 27 projects of Gaur.
JaypeeeInfratech is the developer of Wish Town Project in Noida. However, National Company Law Tribunal has declared the company bankrupt after admitted the IDBI Bank petition and insolvency proceedings has been started against the company.
Sources told the Times of India that the Insolvency Resolutions Professional (IRP) can start giving possession of few hundred ready-to-move flats soon, but the registration will only happen if there is a meeting of the committee of banks. The meeting of banks offering loan to JP Infratech is expected till September 15. This is a direct sign from this step that the interests of home buyers in the real estate business will be taken care of.
Hearing in Supreme Court on Thursday
The case will be heard in the Supreme Court on Thursday in the case of JP Infratech. On a petition filed by a flat buyer Chitra Sharma, Chief Justice J S Khehar, fixed Thursday’s day for hearing.Senior advocate MrAjit Kumar, petitioned to the Supreme Court from MsChitra side. In this petition the petitioner has sought relief under the Consumer Protection Law. The petitioner demanded immediate hearing due to the problems being faced by buyers in the case.
Insolvency Resolutions Professional (IRP) appointed in the Jaypee Infratech case has dismissed the scope for refund to home buyers. However, he has assured that efforts are being made to continue the project development. On 9th August, Allahabad Bench of National Company Law Tribunal (NCLT) declared Jaypee Infratech a bankruptcy on IDBI Bank’s petition.
As per the order by National Company Law Tribunal (NCLT), Jaypee Infratech has been declare defaulted of IDBI Bank as the company is debited of Rs 526.11-crore to Bank. But this move of National Company Law Tribunal (NCLT) against Jaypee Infratech has left more than 32,000 home buyers in the lurch.
Thus, National Company Law Tribunal (NCLT) appointed Mr. Anuj Jain as an Insolvency Resolutions Professional (IRP) so that the action can be taken under the Insolvency and Bankruptcy Code. However, the board of directors of the company will remain suspended. In a FAQ released on Thursday, Mr Jain had requested the Home Buyers to submit the form by August 24 and the supporting documents can be submitted later, but before such a resolution plan has to be filed. The Insolvency Resolutions Professional (IRP) has also made it clear that the 24-day deadline given to home buyers to file claims will not be extended.
Mr Anuj Jain clarified on some media reports, “The Insolvency Resolutions Professional (IRP) has not made any statement to any authority or media representative that some flat buyers can be refunded in some projects or in some of the projects.” The Insolvency Resolutions Professional (IRP) made it clear that JP Infratech is not on the path of insolvency. He said that steps will be taken to fix the company’s condition during this process. The Insolvency Resolutions Professional (IRP) also made it clear that there will be no obstruction to the day-to-day working of the company.
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.