Insolvency: No Special Dispensation For Jaypee Infratech Home Buyers, Says SBI
Buyers and builders should be treated at par and ready to take the haircut: SBI MD
Home buyers of Jaypee Infratech Ltd.’s under-construction projects cannot be given “special treatment”, and should be ready to take a haircut on their investments at par with the builder, State Bank of India Ltd. Managing Director Rajnish Kumar said.
Over 32,000 home buyers, who had invested in the Noida-based company’s real estate projects and are yet to get possession of their homes, were left in a lurch after the National Company Law Tribunal last week admitted an insolvency plea filed by IDBI Bank Ltd.
“Buyers and builders should be treated at par and ready to take the haircut. Though, it is unlikely that either of them can recover full money,” Kumar said at the sidelines of an event in New Delhi on Monday. He added that the loss on account of incomplete projects will be shared proportionately.
We can’t give respite to buyers on EMI. They will have to understand that if they take home loans for under-construction projects, it is a huge risk.Rajnish Kumar, MD, SBI
As many as 27 Jaypee projects are affected by the insolvency proceedings.
Last week, the Allahabad-bench of NCLT admitted insolvency plea of IDBI Bank relating to default of Rs 526 crore loan by Jaypee Infratech. It appointed Anuj Jain the interim resolution professional to carry out the proceedings under the Insolvency and Bankruptcy Code.
Kumar also said that RERA will not help home buyers in this case. Jaypee Infratech’s projects in current their current state are not viable, as is being claimed by home buyers and it therefore had to be admitted under insolvency resolution.
However, Durga Shankar Mishra, secretary in the Ministry of Housing and Urban Affairs, who was also present at the same event, said that it does not make sense for the government to intervene in this matter. "RERA will take care of it," he said.