Flat-buyers mull moving NCLT against Jaypee

Not just corporates and banks but flat buyers are gearing to take the fight to the National Company Law Tribunal (NCLT) against defaulting real estate companies.

In what could be a first, the aggrieved home-buyers in Jaypee Infratech’s projects propose to move the NCLT against the company for not meeting its commitment of delivering flats at the scheduled time and the resulting losses to them.

Speaking to BusinessLine, several flat buyers said that they hoped to convince the NCLT that the delivery of projects must be the priority regardless of the outcome of the insolvency proceedings.

Law firms are also seeking to assist flat buyers, who are worried that the bankruptcy proceedings against Jaypee Infratech will further stall their projects. The buyers are afraid that if they file the claim statement by filling ‘Form F’ then it could have a negative impact on their possession rights.

Madhuri Bakshi, a Director at Conformite Legal Private Ltd, said: “There are 32,000 buyers who are gunning for Jaypee’s projects and almost all of them have the same claims. To establish their rights as a creditor of the company, it is necessary for the buyers to file the claim statement, wherein they can either claim for the possession of the flat or the refund of their money along with interest.

“If possession of flats is not possible then the buyer’s next demand should be for refund of the amount paid with interest that has been paid to the banks.”

Another law professional said, “It is noteworthy that the Jaypee group in itself has not dissolved but Jaypee Infratech, a group company. Avenues for selling other properties of the group to meet the capital requirements for completing the projects are still open.”

The priority of banks is to recover their advances and interest, but buyers want their flats. Buyers fear that they may end up without flats if the NCLT liquidates Jaypee Infratech’s assets to repay the banks.

Suresh Arora, a flat buyer in Jaypee Infratech’s Wish Town project, said: “the completed projects are being sold at ₹7,500 per square feet but pending projects were sold to buyers at ₹4,000 per square feet.

“We just want possession of flats we have already paid for. Since the valuation of property has increased manifold, even if we get back the amount of money we have already paid with interest, we won’t be able to buy the same flats,” Arora said.

Another such project is by Logix Group. The buyers of Blossom Greens project being developed by Logix have also been waiting for possession of their flats since 2012. While the group has not yet been declared insolvent, buyers are worried because of the delayed possession.

In a letter to Finance Minister Arun Jaitley, the Noida Extension Flat Owners Welfare Association has sought relief from EMIs. It also said that some 1.5 lakh buyers in the area are losing hope of getting possession of the booked flats.

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