Delay in possession and litigation in India’s real estate sector is affecting the sector adversely, so much so that the prospective NRI investors are shying away from investing in India.
A large number of them are opting for Dubai, Muscat, and other locations, which are closer to India and easy to travel in a short time. Moreover, properties are available at par with the properties in India with better facilities.
R. Sinha is an NRI for the last 20 years. He invested a good amount of money in the then Jaypee Greens some 12 years ago with an assurance from the builder that he will be given possession in three years.
“Twelve years have already been passed. I had plans to settle in India post-retirement, but I do not see any light at the end of the tunnel. …. There are more than 20,000 homebuyers like me who have invested their lifetime earnings in the project. Nothing is moving and no one is there to listen to the plight of the homebuyers,” he said.
Keeping in mind the grim situation, Mr Sinha decided to invest in a property in Dubai, which has a good track record of timely possession, commitment to promised facilities in the agreement, and good rental prospects.
“I am really upset with the handling of the project. No one bothers for the common man, and the builders go scot-free because they are rich and can create litigation for genuine homebuyers.”
Delay in possession and litigation in India’s real estate sector is affecting the sector adversely, so much so that the prospective NRI investors are shying away from investing in India.
The homebuyers are trapped in legal jargon; the company changed its name and transferred assets from one company to another.
Another NRI homebuyer, Vandana J, says, “I am still waiting to hear some good news about my home, which I booked in 2008. Whenever I visit India, I go to the site, see the house and come back. The structure is ready, the house is ready, only the finishing part has to be done, but everything is trapped in litigation. I can’t believe how a system can be so pro-rich. There is no voice for common man even though the number is something around 23,000 flats.”
“When you ask about the project developments, you get to know so many legal terms like, insolvency, NCLAT, NCLT, IRP, bankruptcy, this court, that court, and finally the Supreme Court, which is hearing the case for so many years,” she said.
She admits she does not know much about law but is forced to. “I had a dream to have a house of my own, but that has been shattered… I am hoping against hope.”
She also finds Dubai a better option for real estate investment.
A source in Square Yards, a real estate company having its office in Dubai, says inquiries from NRIs for property investment in Dubai are there. “Most of them are upset with delay in possession and deliberate litigation by the builders in India,” said the source.
Meanwhile, the common homebuyers have no clue when and how the Jaiprakash Associates Ltd (JAL) transferred their hard-earned money to Jaypee Infratech Ltd (JIL). Today, they are part of the litigation and haplessly looking at the top court (Supreme Court of India) and their political masters.
Defying the fear of Covid-19 pandemic and scorching heat, a section of homebuyers gathered at New Delhi’s Jantar Mantar and submitted a memorandum addressed to Prime Minister Narendra Modi on Saturday (03-04-21).
However, A NEW TWIST HAS COME INTO THE ONGOING LITIGATION PROCESS AFTER THE SUPREME COURT OF INDIA SENT RESOLUTION PLAN BACK TO COMMITTEE OF CREDITORS (COC) FOR FRESH APPROVAL on March 24, 2021.
The apex court remitted to the Committee of Creditors (CoC) the resolution plan for debt-ridden Jaypee Infratech Ltd (JIL). The court said that no new expression of interest will be entertained for taking over the firm, and only state-owned NBCC and private builder Suraksha Realty may file revised proposals.
BACKGROUND OF LITIGATION:
The bookings for the houses started sometime in 2007-2008. Meaning thereby, possessions should have been started in 2010 – 2011 onwards (as per 36 months mentioned in the agreement).
The project got delayed due to the transfer of homebuyers’ funds to other projects.
In 2016 when the homebuyers found some fraud, they hit the street and lodged a case against the builder in 2017.
In August 2017 the National Company Law Tribunal (NCLT) admitted an IDBI Bank-led consortium application.
From their struggle in 2017 till December 2019 the homebuyers did not take rest. Voting was done against the bankrupt builder and the homebuyers heaved a sigh of relief as more than 97 per cent votes went in favour of state owned NBCC to complete the project.
But this new development of sending the resolution plan back to committee of creditors (CoC) for fresh approval has put the homebuyers in a fix.
The homebuyers are not sure as to when they will get their shelter.