Yogi Adityanath government has decided to find out reasons behind the bankruptcy of the private developers. According to the sources, committee would be constituted soon to look into reasons compelling private developers to file for bankruptcy.
There are multiple well-known brands of the real estate industry like Amrapali, Jaypee Group, Three C Homes, Unitech and Sahara who have faced insolvency proceedings in the past.
Since the Yogi government 2.0 has come to power, two companies Supertech Limited and Logix City have also filed for bankruptcy voluntarily before the National Company Law Tribunal.
Wave real estate group was a large player in March 2021 but they have also filed for bankruptcy voluntarily.
While companies have been declaring themselves bankrupt, urging the tribunal to liquidate their assets to arrange for funds, buyers have been in a quandary in the absence of time-bound delivery of units.
An officer said that in Noida and Greater Noida, lakhs of homebuyers are waiting for their units even after making payment to developers and there is no clarity on the delivery schedule. “Even after RERA came into force, things have not been streamlined. What is prompting developers to declare themselves bankrupt is something we need to probe. ” RERA came into force from May 1, 2017.
“In Noida and Greater Noida, majority of projects, that are stuck or lying incomplete, were launched between 2009 and 2014. Framework under RERA became effective long after that. After realizing payments for the units from buyers and banks, developers are the ones who have made the highest profit. It is much easier for them to exit the project instead of fulfilling their obligations.
“Insolvency proceedings and liquidation are a complex process and take a lot of time. Before taking any adverse action against developers, authorities need to think of ways that can protect the third party’s rights and insulate homebuyers and other stakeholders,” said Manish Kumar, senior vice-president of Noida Extension Flat Owners’ Welfare Association.
