Jaypee homebuyers write to insolvency board

Homebuyers of the embattled real estate developer Jaypee Infratech have urged the Insolvency and Bankruptcy Board of India (IBBI) to ensure that the basis of calculating voting share of homebuyers in the committee of creditors (CoC) should be ‘an aggregate of the principal amount paid to the real estate developer’. Earlier this month, president Ram Nath Kovind gave assent to the Insolvency and Bankruptcy Code (Amendment) Ordinance, 2018, providing significant relief to homebuyers by according them financial creditors’ status. So, in case a company/developer is declared insolvent and a resolution professional is appointed, homebuyers can participate in the resolution process, thereby making their voices heard. They will be placed higher than non-financial unsecured creditors. In a letter addressed to the chairman and the members of the board, as many as 2,460 homebuyers have reiterated their demand for a compensation in the form of interest at 15% per annum on the principal amount calculated from the date when the delivery of flats was promised. Such a provision would ensure that the homebuyers are equitably resituated in respect of the inordinate delay they have suffered in the completion of real estate projects. Further, a provision in this regard would be in compliance with RERA and various orders of the honourable Supreme Court,” the letter said. The homebuyers have also asked the board to specify the manner of voting in meetings of the CoC.