The National Company Law Tribunal (NCLT)’s order to start insolvency proceedings against Granite Gate Properties, a real estate firm in Noida, has left over 3,000 flat buyers who have invested in the properties being constructed by the firm in a state of despair.
Miffed with endless delay in the completion of projects, home buyers had complained to the NCLT about the firm’s inability to complete the projects. On Thursday, the NCLT ordered the insolvency proceeding.
Flat buyers have been waiting for the completion of their flats for several years now. The firm—which is a sister company of 3C builders—had in 2010 launched two housing projects in Noida, Lotus Panache and Lotus Boulevard. Only 1,000 flats out of 4,000 have been constructed so far.
The hope of getting their dream homes now lies on the course of action taken by the appointed insolvency resolution professional (IRP) who is yet to take over the charge.
A few home buyers feel that the path to getting possession of their dream house will not be as full of hurdles as for those who have invested in projects like Amrapali or Jaypee Infratech. “The remaining incomplete flats are at an advanced stage of construction and hence will need a revenue of about Rs 250 to 300 crore to complete the projects, which can be generated by selling firm’s assets,” said Amit Chauhan, a flat buyer.
Another hope for flat buyers is the IBC (Amendment) Ordinance, 2018, under which homebuyers have been granted the status of financial creditors. Accordingly, home buyers will now be entitled to a seat on Committee of Creditors (CoC) of the corporate debtors.
“This is the first instance where Insolvency and Bankruptcy Code (IBC) has been ordered and no banks are involved in the case. Hence there is no compulsion to fulfill banks’ obligations. Let’s see how IRP handles the case. If nothing satisfactory comes out of it, we will decide our further action,” said Chauhan.
Ritesh Kumar, advocate who representing home buyers in Amrapali case in the Supreme Court, said that the new amendment has empowered the home buyers. “As financial creditors, home buyers can now decide the future of defaulting builders alongside their lenders,” he said.
Talking about the Lotus projects, Kumar said that the situation entirely depends on how IRP proceeds. “Within 270 days, IRP will have to dissolve the board of firm’s directors and take over the charge. After that they will have to find out ways for revenue generation. They may invite bids to sell firm’s property or may invite other firms to takeover the projects. A complete resolution plan will be prepared and submitted before the NCLT to decide further action,” Kumar said.