Home buyers of Jaypee Infratech's (JIL) residential projects on Monday said they are opposed to the liquidation of the company or its acquisition by Jaiprakash Associates (JAL), as the latter failed to deliver flats to several buyers and it is likely to become insolvent soon.
"The home buyers demanded that JAL should not be allowed to regain control of JIL as JAL has huge liabilities of Rs 37,000 crore with various banks and JAL has defaulted on its various loans and is on the verge of insolvency," a statement from the Jaypee home buyers said.
Another group of aggrieved home buyers, Developers Township Property Owners Welfare Society, Noida, said the Insolvency and Bankruptcy Code (IBC) is not completely applicable to the real estate sector.
Arvind Jain, President of Developers Township Property Owners Welfare Society, said: "The Insolvency and Bankruptcy Code which was largely meant for distressed industrial companies does not apply for real estate companies. All such companies have depreciating assets, therefore IRP (interim resolution professional) was allowed to place a Distress Sale Value of assets."
"Real estate projects include land and buildings which are appreciating assets, so it was wrong to place a Distress Sale Value on such assets. This is why, we oppose the liquidation of Jaypee Infratech under the IBC," he added.
The home buyers opposed the decision of the lending banks or the Committee of Creditors (CoC) of JIL to liquidate JIL and said the banks and JAL are acting in collusion for the last seven to eight years with a view to defeat the interests of the home buyers.
Last Friday, Jaiprakash Associates had asked the Supreme Court to consider its resolution plan for revival of Jaypee Infratech, which the home buyers are opposed to. The next date of hearing has been fixed May 16.
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