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Jaypee homebuyers may get 'client' tag cover in insolvency case

The government will ensure home buyers do not suffer, says an official

Subhomoy Bhattacharjee  |  New Delhi 

Jaypee homebuyers
A day after the Allahabad bench of the National Company Law Tribunal admitted IDBI Bank’s insolvency plea against Jaypee Infratech, homebuyers staged a protest outside the Jaypee Group’s Sector 128 office in Noida on Saturday | Photo: PTI

Those who have booked with may not need to fill up any form to protect their interests in the proceedings.

Plus, to ensure that their interests are protected, along with those of institutional like and other financial institutions, the is planning to insert a new category of “clients” with rights in the proceedings. 

A senior official confirmed that discussions were on between the ministries of corporate affairs and finance to work out the details. "The will ensure homebuyers do not suffer," the official said.

As real estate such as are being dragged into proceedings by their lenders, mostly banks, fear has set in among those who had booked flats with these that the money they had put in to buy homes with these might be wiped out.

The have moved after waiting for years to recover their sunk in many of the projects floated by many real estate at the height of the housing bubble. The have used the recently created and Bankruptcy Code, 2016, enacted by Under the Act, can ask the courts to seize the assets, mostly the buildings constructed by the real estate companies, to square off against their But homebuyers stand on a different footing as they are not to the projects. 

Recognising the problem, the agencies are working to amend the definition of to include them as clients whose interests will be on the table and, thus, protected. In the specific case of Jaypee, while the and Bankruptcy Board had devised a form last week for the homebuyers to fill, the has decided that even if any buyer fails to provide any details by August 24, his interests would be protected. 

The details of the buyers will be obtained from the registers of the real estate company by the professional, Anuj Jain, and his team. About 32,000 homebuyers are believed to be affected in the Jaypee case. “We are learning on the move and the precedent is likely to be applied for other cases too,” the official said.

First Published: Tue, August 22 2017. 01:44 IST