Jaypee Infratech’s home buyers are facing unprecedented circumstances.First time a housing company has reached the threshold of bankruptcy. There is a very uneven position for home buyers. If a steel company is bankrupt, then its impact on people is not very much, but when a real estate company that is building houses now, if it is bankrupt then the situations become challenging, especially for buyers. This is the reason why the case of JP Infratech is quite serious because in this case different laws and some would be interpreting each other’s contradictory laws that will become the case for future cases. What should the home buyers do in such a situation, to JP Infratech? Now, what is the next step to them, let’s know.
Make Your Claim in Company Law Tribunal: The National Company Law Tribunal (NCLT) has appointed an Insolvency Professional on Thursday to see the process of bankruptcy. Buyers of JP Projects can claim till August 24. Insolvency Professional will claim in prescribed form in a day or two.
Do not Stop Repaying EMI: If you have taken a loan from the bank and you are waiting for a home possession then you should not stop paying EMI. According to experts, Insolvency will try to revive the professional company, so the buyers will be left with a hope for some extent. Withdrawing the EMI will not only increase the risk of credit rating of the buyers, but will also have to face difficulties during the bankruptcy process.
What is a Revival plan?: Insolvency Professional has to make a reliable revival plan within 270 days for housing schemes. For this, they can also get 90 extra days of extension. The whole process of revival will be under the care of the court. Revival process is not as intuitive as other companies. This is because the thousands of buyers have invested in the company, so revival is very important for them. If the company does not improve the situation, its assets will be sold to repay its debt.
One More Option: Even if the company is not a revival, there is a way that the bank can buy the company’s equity. Good money can not be collected even by selling the property of the bankrupt company, because the buyer of the property of the distressed company would be willing to pay an average price of three and a half times. However, these properties can get a good price later. Therefore, instead of removing their money by selling the property of the company, the bank can buy the equity of the company. In this case, buyers can get a good deal because the bank will also try to revive the projects.
What are Your Rights in Terms of Liquidation?: If the company does not have a revival, then it will be liquidated that means the lenders will be paid by selling their properties. In the case of the housing company, the situation becomes complicated because in other companies, lenders can be easily classified. But in the current case, buyers are the real lenders of the company but they will not get the right as a secured creditors. Home buyers will not be considered equal to banks because banks are the main lenders. The money that will be collected by selling the assets will be shared first among the banks and in the end, if the money is left, then the home buyers will be given it.
Look and Wait: Since thousands of home buyers have a direct interest, so the court can sympathize with them. This is the first case of its kind and there are so many laws related to it. Some of these laws are contradictory to each other, who need interpretation by the court. The court can decide on the interests of home buyers in this regard. In such a case, the best policy for the buyers is “Wait and Watch” and they should also seek legal help.