SC directs banks to settle Homebuyers’ claims first

The Supreme Court on 15.03.2018 directed the creditor banks to keep their hands off the Amprapali project. Further, holding the interest of homebuyers who have invested in the projects but have not been given possession has to be given priority over the claim of financial institutions to recover their loan from the company. The SC by giving assurance to more than 41,000 flat-buyers who are facing uncertainty due to the company's failure to hand over flats and the initiation of insolvency proceedings against it, a bench of Justices Arun Mishra and U. U. Lalit said their problem would be addressed first by the court and claims of banks to recover their money considered at later stage. They said homebuyers' stakes could not be compromised to protect the interest of creditor banks. “ You have to wait till we give justice to flat-buyers. Till then you will not be able to touch the properties (housing projects). At the same time, we will also protect your interest. Our order is very clear and we will drag people for contempt in case of any violation,” the bench told the banks after their lawyer pleaded for the court's direction to get their money refunded from the company. Now, the Interim Resolution Professional (IRP) has taken over the responsibility of Amrapali after NCLT acknowledged the insolvency proceedings initiated by Bank of Baroda against the firm on September 4, 2017. Since the investments by the homebuyers have been put at the bottom of the priority list in insolvency proceedings, they could only be refunded after the banks recovered their dues after selling the assets of the company, making the position of buyers extremely vulnerable. In addition to this, Advocate Gaurav Bhatia, appearing for the company, told the bench that Amrapali had started construction work in Leisure Park project at Greater Noida (West) as directed by the Apex court. The project contains 19 towers and approximately 1665 flats.