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IF COMPANY DECLARE ITSELF INSOLVENT THEN WHAT HOME BUYERS SHOULD DO?
Posted on 31st Dec 2017 16:21:33 in Frauds
Few days before only national company law tribunal NCLT had declared jaypee infratech as insolvent, as when company became insolvent then his assets are being sold off paid to the creditor, when any company is declared insolvent by the NCLT then some days are allotted to the creditors so that they can claim.
But if we talk about the homebuyers who have paid the full amount and waiting for their turn, they were having the hope one day jaypee group will deliver the flat , but all of sudden they come to know that their hard earned money gone to vein and jaypee infratech declared itself insolvent .
Those who are educated or those who have enough money they will hire advocate but what about those who don’t have enough money and they are not educated too but they have invested in the company like jaypee infratech ,so for them there is no needs to take tension we are here to help you out .
there is no need to panic just read this article you will get solution of every problem .there might me various question in your mind is I should stop paying EMIs or I should stop so stop thinking we are there for you .
Raise your claim
The National Company Law Tribunal (NCLT) has appointed an insolvency professional to carry out the proceedings under the Insolvency and Bankruptcy Code. The buyers in Jaypee projects can raise claims till August 24. The insolvency professional will invite claims in a day or two in prescribed forms.
Don't stop EMIs
Experts do not recommend buyers, who had taken bank loans but haven't got possession of homes, to stop equated monthly installments (EMIs). The insolvency professional will try to revive the company so there is hope yet for the buyers. Stopping EMIs can impact their credit rating negatively and make their participation in insolvency proceedings problematic.
What is the revival plan?
The insolvency professional is required implement a credible revival plan for the housing schemes in 270 days which include a 90-day extension. The whole process of revival will be monitored by the court. The revival process is not going to be as simple as for other companies. Since thousands of buyers have invested in the company, a lot rides on the revival and it may be the best way out of the mess. If the company does not turn around, it will ..
What are your rights in case of liquidation?
If the company does not turn around, it will be liquidated and the assets sold to give money back to creditors. A unique problem for a housing company is that in case of other companies creditors can be easily classified. But in the present case, buyers who are actually creditors of the company will not have the first right as secured creditors. They will not be treated equal to banks who are the main creditors. The money realised from liquidation of assets will be distributed first among banks and the remaining will be given to the homebuyers. If the banks get the first right on liquidation proceeds, enough may not be left to compensate the buyers.
If the company does not revive, it may still not be liquidated if the banks are willing to buy equity in the company. The assets, such as land parcels, won't fetch a good price at this time but might appreciate over time. So banks might take equity in the company instead of getting their money back through immediate sale of assets. In this case, the buyers may get a fair deal as the banks will also try to revive the projects.
Wait and watch
Since interests of thousands of home buyers are involved, the court is likely to take a view sympathetic to them. It is a first such case and there are so many laws which may collide with each other and require interpretation by the court. Insolvency proceedings might render the cases which are already going on against Jaypee Infratech infructous.Yet there is enough scope for the court to take a considerate view to safeguard interests of buyers. The best policy for buyers should be to wait and watch and get legal help.