NEW DELHI: The ongoing spat between lenders and home buyers in the Jaypee Infratech case is forcing the Insolvency Law Committee, Ministry of Corporate Affairs (MCA) and Insolvency and Bankruptcy Board of India (IBBI) to deliberate on the voting rights of home buyers.
On Friday, lenders rejected the bid of Suraksha Group after it had already refused to consider the revised bid of NBCC over lack of government approvals. This has once again derailed the whole process and has resulted in huge difference between the lenders and homebuyers over their voting rights.
“The IBC has certainly made an impact in the last three years. But it is still an evolving law. In light of the recent Jaypee Infratech insolvency case, some concerns were raised over voting rights of special class of lenders including homebuyers. ILC, IBBI, MCA and finance ministry are already discussing the matter,” a senior MCA official said.
He said that the government will soon review the issue after holding consultations from all stakeholders regarding the rights of the special class of financial creditors. In the Jaypee Infratech case, the spat between lenders and home buyers came into open in several instances. While buyers wanted forensic audit of Jaypee’s accounts, lenders rejected the move, after which the buyers publicly accused lenders of siding with promoters and not with them.
The lenders, in turn, accused that home buyers were not participating in the process and requested a six-month extension from NCLT to complete the resolution process. According to the Committee of Creditors, one of the major concerns the lenders flagged was of bogus home buyers affecting the resolution process. Many such cases were reported in Jaypee and similar cases.
“There’s a need to review rights of home buyers. Home buyers who have already been allotted the flat cannot be treated as a financial creditor. So, there is some problem in the concept,” said Advocate Sumit K Batra.
Raison d’etre
In the Jaypee Infratech case, the spat between lenders and home buyers came into open many times. While buyers wanted a forensic audit of Jaypee’s accounts, lenders rejected the move, after which the buyers publicly accused lenders of siding with promoters and not with them