‘No one’s thinking of the homebuyer’
Five years ago, street protests broke out as buyers realised Jaypee would not be able to deliver 22,500 flats in its Noida projects, primarily Wish Town. Today, after many legal battles, government intervention and a complex insolvency resolution process that has not made any headway towards an answer, the buyers are no closer to getting their flats than they were five years ago. It’s been a long, attritional battle without a final solution. Sharmila Bhowmick reports
For years, Krishan Mitroo would hit the streets alongside many others waiting for possession of their houses and shout slogans against Jaypee Infratech Ltd. Now tired and a little subdued, the 70-year-old has moved out of the protest group, hoping to find a more effective way of getting his flat.
Like Mitroo, thousands of Jaypee homebuyers have been left wondering what the years of protests and court battles have come to. What started with a protest on the streets five years ago has turned into a massive movement involving 20,000 buyers, the government, the Supreme Court, the insolvency court and the consumer court. Yet, the flats aren’t any closer to completion today as they were five years ago.
In the meantime, in addition to the EMIs they pay for their undelivered flats, homebuyers fighting the legal battles — most of them have booked flats in Noida’s massive Wish Town project — say they have collectively spent several crores in hiring lawyers and filing cases.
And the insolvency resolution process has gone nowhere in the direction the buyers wanted as JIL’s institutional lenders took a polar opposite stand, voting against the takeover of the company by the state-run NBCC, which buyers believed was their best hope for completion of the flats. Now, NBCC has seen a management change and its interest in JIL appears to have cooled.
“From protests to the Supreme Court to the NCLT, buyers have come back to where they were. They have lost faith in Jaypee. No candidate emerged from the resolution proceedings to complete the houses. Each step has been a struggle. For me, it has become a full-time job for the last few years. The buyers are tired. We don’t know what is waiting for us next,” says Mitroo.
Flats in Wish Town were booked mostly between 2008 and 2009 and should have been ready by 2011-2012. However, the deliveries stopped after the first 5,000 units. A stay on construction within 10km of the Okhla Bird Sanctuary between 2013 and 2014 slowed down the process further. But 2016 onwards, as patience started wearing out, buyers started taking legal steps. By 2016, several dharnas and roadshows had been staged. Some buyers moved the National Consumer Disputes Redressal Commission (NCDRC), and claimed compensation for the delay.
The real legal battle began after IDBI Bank initiated insolvency proceedings against JIL in NCLT. Homebuyers, desperate to see their interests protected in an insolvency resolution, moved the Supreme Court. Chitra Sharma was the first to file a petition. One by one, other buyers joined. “A panic wave had started. If we did not join the legal battle, we would be left out,” a homebuyer said.
The NCLT case also marked a change in the point of contact, from Jaypee to the insolvency resolution professional (IRP). “A new struggle had begun — to follow every step of what the IRP was planning to do and what would be our fate. We followed every NCLT move closely,” says Pramod Kumar, who has been getting buyers together for legal battles. “When the NCLT appointed an IRP, the buyers thought there would be justice. But then, we realised we may get a devalued return on our investment and a bulk of our money would be gone. After the first resolution, we were told of big players’ interest in completing the flats. We heaved a sigh of relief, but nothing really came of these.”
After a long and complicated insolvency resolution process, during which the Supreme Court intervened to give the buyers financial creditor status and the Centre amended the Insolvency and Bankruptcy Code to protect homebuyers’ interests, the two companies that emerged frontrunners for a possible takeover of JIL were Suraksha and NBCC. Suraksha was favoured by the banks — the operational creditors but the buyers wanted NBCC. They could never get past this stalemate.
“It has been a journey of confusion and heartache. Besides, the financial struggle that we are dealing with anyway seems like a never-ending journey. Slowly, the buyers too have polarised. Some of us want Jaypee to finish the flats, others are persisting on legal battles,” says Rashmi Singhal (45), who has booked a flat at Crescent Homes.
Rashmi has invested Rs 46 lakh in her Jaypee home but has been living in an apartment in Gurgaon on a monthly rent of Rs 31,000. “Initially, the buyers protested in a scattered manner and then we united in small groups. Nine groups were eventually created to help take the buyers’ struggle forward. Even after all this, the buyers seem to have achieved little so far,” says Vishal Dwiwedi (37), who has booked a flat in Cube.
Having gone from hearing after hearing and found no solution, the buyers say they will return to the streets again, asking the government to take note of their problems. “I fought tooth and nail for my flat because I had planned my retirement by investing
in three flats in Jaypee. The buyer is clearly not on the agenda of anyone at the moment. Banks, too, are keen on just recovering their money. It is the buyers who have invested the most, they should be the primary concern,” says Ajay Kaul, who left his hometown, Kashmir, in the 1990s because of political turmoil. “It has been a decade since I invested in the flats. The entire purpose for which I had bought these houses has been lost,” he adds.
In the first nine months of insolvency proceedings, 18 companies expressed interest in completing the flats, but none of the proposals materialised. Handing over the flats is easier said than done because of the sheer numbers that remain to be completed — 22,500, all projects combined.
But what makes it more difficult is the financial complication. According to the NBCC estimate, Jaypee still needs Rs 6,000 crore to complete the flats. While Rs 3,200 crore more is to come from buyers, the remaining Rs 2,800 crore has to come from other sources. A large sum, Rs 750 crore, is parked with the NCLT, transferred from the Supreme Court registry where Jaypee deposited the money on court orders for refunds to homebuyers.
“The biggest challenge now is to start the payment cycle of buyers. Dues worth Rs 1,000 crore are pending as buyers have stopped paying because of court battles. We are also of the view that instead of wasting more time on legal battles and trying to find a company to help complete the construction, we should just support Jaypee to complete the pending flats for us,” says Ashish Mohan Gupta (50), an investor in Wish Point, a commercial space at Wish Town.
Source : The Times of India