Greater Noida Authority to Take Over Stuck Realty Projects

In a move that can benefit thousands of aggrieved homebuyers, the Greater Noida authority has decided to take over control of some stuck projects of bankrupt realty firms through proper channel, and ensure their timely completion. The authority aims to take over such

BY Realty Plus
Published - Wednesday, 16 Dec, 2020

Greater Noida Authority to Take Over Stuck Realty Projects

In a move that can benefit thousands of aggrieved homebuyers, the Greater Noida authority has decided to take over control of some stuck projects of bankrupt realty firms through proper channel, and ensure their timely completion. The authority aims to take over such projects by participating in a process underway at the National Company Law Tribunal (NCLT). According to the Greater Noida authority’s estimate, there are at least 36 realty firms which are facing trial at NCLT. “We will submit our resolution plan in order to take over defaulted realty project with an aim to deliver the same and benefit homebuyers. We have got information that some companies are being taken over at very low valuation causing loss to homebuyers. To protect their interests, we will step in those cases, where the valuation of a defaulted company is less than the market rates,” said Narendra Bhooshan, Chief Executive Officer, Greater Noida authority. Bhooshan further said that if, for example, a defaulted company is getting a rate of ?100 per square metres when the rate should be ?500 per square metres, then the authority will come forward to protect the interest of homebuyers and the government. Under section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, financial creditors can drag debt-ridden real estate companies to NCLT. Subsequently, NCLT appoints an interim resolution professional (IRP), who then invites resolution plans from interested companies, including the government agency, in order to revive the defaulted company. All stakeholders, including homebuyers and banks, vote for a new company who have better resolution plan to take over the bankrupt realty firm. “If a realty firm is not valued properly by participating bidders, then it affects our interests as well as homebuyers. Therefore, it is better that we take it over through the process and develop it,” said Bhooshan. Homebuyers have been demanding that the government entities must take over the defaulted realty projects.