Greater Noida Authority is now submitting a caveat to the NCLT per which the latter cannot declare any real estate firm as insolvent without informing the Greater Noida Authority.
After the Allahabad bench of the National Company Law Tribunal (NCLT) had declared Amrapali and Jaypee as insolvent companies the plight of homebuyers, who are struggling for possession has worsened. This insolvency declaration, among other things, has made Greater Noida Authority powerless in terms of intervention (from the homebuyers’ side).
Now Greater Noida Authority has taken a decision of submitting a caveat (a notice, especially in a probate, that certain actions may not be taken without informing the person who gave the notice) to the NCLT. This would ensure that going forward NCLT cannot declare any real estate firm as insolvent without informing the Greater Noida Authority.
This move is particularly pertinent in the current scheme of things.
According to officials of the Greater Noida Authority, developers of several projects in the area are not paying their bank instalments. They are also not paying their dues to the authorities. “There is a strong possibility that the banks shall soon file cases against the defaulting builders in the NCLT. As a safeguard these builders shall file insolvency petitions and a similar situation of helplessness will occur as Greater Noida Authority will then be rendered powerless. We have a right to question the builders operating in our area and hence we are submitting this caveat per which NCLT shall have to hear our verdict against the builders before declaring their companies insolvent,” officials stated.
Greater Noida Authority officials also backed their decision of caveat submission with the logic that since the land for real estate projects are granted by them they become answerable to the buyers.
Bal Krishna Tripathi, additional chief executive officer of Greater Noida Authority, said that the authority is taking the help of legal experts on the matter.
On August 9, NCLT had admitted the insolvency petition filed by IDBI against debt-ridden Jaypee Infratech. On September 19, the Noida Authority also filed a claim of Rs 650 crore in the National Company Law Tribunal (NCLT), an Allahabad High Court bench, against Amrapali Silicon City, Sector 76, Noida. Buyers had alleged that builders have diverted the money collected from them into other construction projects thereby causing delays in terms of possession.