BUSINESS
Homebuyers of Jaypee Infratech are planning to approach the court
Hopeful of getting a fair treatment after reclassification as financial creditors, the homebuyers of Jaypee Infratech are planning to approach the court to rerun the ongoing resolution process under the amended Insolvency and Bankruptcy Code (IBC).
The government on Wednesday approved changes in the IBC through an ordinance that gives homebuyers the status of financial creditors at par with banks in the insolvency resolution process. "Once the ordinance is promulgated upon getting President's assent, we will approach the National Company Law Tribunal (NCLT) to rerun the resolution process," said Ramakant Rai, who is representing a large number of homebuyers in the Jaypee Infratech case.
Jaypee has failed to deliver 25,000 flats to the buyers citing lack of funds. The realtor had raised around Rs 12,000 crore from the buyers for its Wishtown housing project in Noida in the National Capital Region.
Rerunning the case would mean starting the process from the stage of invitation of fresh bids and reconstitution of the Committee of Creditors (CoC). So, even if the changes are prospective, it would not matter in this case, Rai said.
Currently, the resolution process is heavily tilted in favour of banks, whereas homebuyers have little say in it, homebuyers and lawyers feel.
Even as their contribution in most real estate projects is more than that of banks, homebuyers are unable to participate equitably, leave aside preferential treatment, rue lawyers and homebuyers.
Jaypee raised about Rs 12,000 crore from homebuyers in instalments and booking amount which was much higher than Rs 8,276 crore raised by it from the banks. However, homebuyers were offered only 30% as compared to banks which were offered 70% of the bid price of around Rs 10,000 crore earlier quoted by a company during the resolution process.
With better representation on the CoC, homebuyers hope to get this order reversed.
"This is likely to get reversed if the new bids are invited. Given that Rs 3,500 crore is required to complete the remaining 60% construction in the project, the homebuyers are likely to get 4-5% of the principal amount as delay compensation," Rai said.
However, even in this scenario, the homebuyers are looking at 20% haircut on an average instead of 42% expected earlier, experts point out.
Classification as financial creditors will allow homebuyers to have a greater say in the resolution process and protect their rights. Homebuyers will have voting rights and can now participate in the CoC meetings. Till now, they had no voting rights and were sitting outside the CoC.
A total of 66% members of the CoC can decide on a resolution process. This will allow homebuyers to insist the bidders to include delay compensation in the resolution plan.
However, "placing thousands of homebuyers on CoC could be tricky. Some of them may not come to vote, while others may have a different opinion," said Aaditya Gutgutia, one of Jaypee homebuyers. Gutgutia feels that placing homebuyers on par with banks in the IBC proceedings would have solved the problem in entirety.
Homebuyers will be treated at par with banks during the insolvency resolution process. However, if the resolution process fails and the company is forced into liquidation, homebuyers will be placed after the banks as realtor has given land assets as collateral.
Meet the Muslim king all set to challenge Donald Trump over Gaza, he is from...
Ranveer Allahbadia’s viral joke on Samay Raina's India's Got Latent was stolen! The original was...
THIS Indian billionaire carries coffin of his employee, netizens call him ‘true leader’
Days after Jeet Adani-Diva Shah's marriage, Gautam Adani set to spend Rs 6000 crore on...
'Please let me stay the night:' Female trainee asked to leave Infosys premises at 6 pm even after...
Auto driver’s son studies at IIT, but luxury hotel refuses his auto's entry, billionaire calls it...
Who is Kuldeep Sharma? Ex-IPS gets three-month jail term in...
Meet woman, who lived in village, later got job at Amazon, now working in US as...
Beef Biryani Row Explained: Police file FIR day after incident at AMU; here's what happened
Meet Anant Ahuja, Sonam Kapoor's brother-in-law who reportedly got Rs 6.56 cr by USAID
BIG move by Mukesh Ambani, launches Rs 10 product with former cricket star, it is...
Car gets stuck in wheat field in the dead of night, know what Google Maps error caused later
The Chabahar Puzzle: India’s Connectivity Dreams in US-Iran Turmoil
Delhi: Girls showcase their skills, strength in netball, Aali and Lal Kuan emerge winners
Elon Musk reacts to UK MP’s demand to replace 'Bengali' signboard at London Station, check here
Anupam Mittal's unique gift to Gautam Adani's son Jeet Adani will leave you in splits
Man dies after being sexually assaulted in Delhi, one arrested, this is what happened
After Deepinder Goyal's Zomato, here is the list of Indian companies that recently rebranded
Life Insurance Quotes Explained: Guide to securing your family’s financial future
Winter Essentials: Must-have home appliances to keep you warm, cozy
'Ishq Na Kario' Releases: Abhishek Kumar takes his first step in cinema
Roadmap to building Rs 5 crore retirement corpus with NPS
Sri Lanka suffers nationwide power outage due to monkey, know what exactly happened
Fatima Sana Shaikh makes this BIG claim about male actors, says, 'If Shah Rukh Khan...'
The Visionary Behind Modern Data Platforms: Shreesha Hegde’s blueprint for industry success
Sam Nujoma passes away at 95: Know all about Namibia's fiery freedom fighter and first president
'Jahan Kaam, Wahan hum': PM Modi pitches leadership mantra to students during Pariksha Pe Charcha
Raheja Developer's 42-floor The Leela Sky Villas to bring ultra-luxury to Central West Delhi
Cristiano Ronaldo doesn't have any tattoos, reason will leave you SHOCKED, it is...
Prayagraj sees 300-km-long traffic jam, leave devotees without food, water amid Mahakumbh
Tirupati Laddu Prasadam row: CBI arrests four people in ghee adulteration case
JEE Mains 2025 Result: NTA JEE Session 1 result to be declared on..., know how to download scorecard
Donald Trump reveals BIG plan, says committed to 'buy and own' Gaza, allow others to...
Did Lionel Messi’s son Thiago score 11 goals in single match for Inter Miami? Here's the truth
India vs England: Rohit Sharma goes past Chris Gayle in all-time ODI list led by Shahid Afridi
Ed Sheeran BREAKS silence after Bengaluru cops stop his street performance: 'It wasn't just...'
India gains, Pakistan struggles: Forex reserves rise to Rs 55300044 crore, Pak's decline continues
IND vs ENG: Rohit Sharma returns to form before Champions Trophy, slams 32nd ODI century vs England
'Mummy daantegi...': Little boy screams as tiger pulls his shirt at zoo, WATCH viral video
Manipur CM N Biren resigns nearly two years after ethnic violence in state
Viral Video: Women travel in train toilet to Maha Kumbh, internet says "Is this a joke?
Vicky Jain's 'bizarre' comment leaves wife Ankita fuming with anger, netizens declare him 'red flag'
Bengaluru cops stop Ed Sheeran's street performance, video goes viral - Watch
Viral video: Lion spotted on moving jeep? Here’s the truth
YouTuber Gaurav Taneja reveals he was 'shocked' over his wife's decision to...
Teddy Day 2025: Date, history and significance of the fourth day of Valentine’s week
'Sugar is the biggest toxin...': Naga Chaitanya calls sugar more toxic than alcohol and tobacco
‘Over for Blinkit, Zepto’, this startup claims ‘delivering humans’ in 10 minutes, shocks netizens
Pratik Gandhi on his struggles, managing job with acting: 'Chaar gante sona luxury tha' | Exclusive