Last week, the Centre amended a few clauses in the Insolvency and Bankruptcy Code (IBC) to enhance homebuyers’ rights. However, experts feel that bankrupt Jaypee Infratech’s customers will need to wait longer until they receive possession of their flats.
According to the amendments, the new deadline for completion of the corporate insolvency resolution process has been set at 330 days, including litigation and other judicial processes. Before the amendment, the process had to be completed within 270 days. Moreover, the proposed amendments seek to lower the threshold for approval of a resolution plan to 50 per cent of the committee of creditors (CoC) from the current 66 per cent, which may favour homebuyers.
Although, these are welcome moves, Jaypee homebuyers are still desperate to know if they will be given a concrete deadline.. “Some changes are made, but no one is answering when we will get our flats. We have wasted so much time and there is still no clarity on who is finally going to work on it. So far, we were okay with the National Buildings Construction Corporation (NBCC) finishing our flats, but the CoC has problem and the project stuck again,” said Sameer, one of the Jaypee homebuyers.
On July 17, the National Company Law Appellate Tribunal (NCLAT) made it clear that the resolution applicant will have to protect the interests of around 23,000 Jaypee homebuyers, and directed banks to submit terms and conditions for fresh bidders.
The CoC is also planning to take up Adani Group’s bid in their next meeting, according to sources at Jaypee. “Adani will be sweetening the deal and the CoC might take it into consideration, but much depends on whether the deadline is extended, in the light of current amendment of 330 days deadline,” a Jaypee official told this publication.
Meanwhile, experts claim that the IBC alone cannot sort out this issue and the government has to sit with all stakeholders to find a holistic solution. “One problem with the IBC framework is that it is lender-centric and not homebuyer-centric. The main question remains who is going to complete the houses and from where the funds will come to complete the half finished units. There is a need to sit together and find a solution, which also requires a strong political will,” said Niranjan Hiranandani, chairman, Naredco. Meanwhile, the government has informed the Supreme Court that amendments to the IBC would ensure benefits to all stakeholders of the embattled real estate firm. Besides, it said it is working on providing a solution to the homebuyers.
Appearing for the government, Additional Solicitor General Madhvi Diwan had informed the apex court on July 11 that it was working on a uniform proposal to address the grievances of homebuyers who have been stuck with incomplete projects for almost a decade. This proposal would be submitted during the pending Unitech case by July 23, she had added.