The Supreme Court
(SC) has stepped in to safeguard the interests of thousands of homebuyers in the National Capital Region after the civic authorities as well as the government failed them, according to finance and consumer affairs professionals.
The apex court’s directive on Monday to Jaypee Associates
to deposit Rs 2,000 crore by October 27 with its registry came a week after it had stayed insolvency proceedings against its infrastructure arm, Jaypee Infratech.
While homebuyers, they say, have a long-drawn battle ahead, the court’s order will help start that process. “The directive by the SC to Jaypee Associates
is in the interest of homebuyers, and we fully support it. It shows the intention of the judiciary to protect the public from misdemeanours of corporate bigwigs,” said Shyam Agrawal, president, Institute of Company Secretaries of India (ICSI).
A combination of throwaway land prices, greed, and disregard for the law led to the bust of Delhi-NCR real estate. Industry experts say the crisis that has engulfed once-booming real estate market, mainly in the satellite cities of Noida and Greater Noida, had a flawed foundation to begin with.
Around 30,000 homebuyers of Jaypee and 40,000 of the Amrapali group have been trying to get the possession of their properties for the past seven to eight years. The possession was promised within two to three years.
Experts say time is right for the government to step in as the court has already given a direction to the discourse. “Courts have already given a direction. Now the government should work as a facilitator and take over the projects. Solutions need to be customised. Be specific, viable and have a specific course of action,” said Neeraj Sharma, director, Grant Thornton Advisory Private Limited.
However, consumer rights experts maintain, while courts are coming out with good rulings, the implementation is still missing. “It is an excellent decision, but implementing it will be quite cumbersome. Only taking money will not help. Homebuyers, who have been paying rent as well as EMIs for years, should be suitably compensated. The judiciary needs to come out with a timeline on how and when homebuyers will get actual relief,” said Bejon Mishra, founder, Consumer Online Foundation.
Flatbuyers, under the Insolvency and Bankruptcy Code, 2016, do not fall in the category of secured creditors like banks, and hence they can get back their money only if something is left after repaying the secured and operational creditors, one of the pleas filed by some homebuyers said.