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Third party wants to invest Rs 5k crore in botched-up real estate project

Third party wants to invest Rs 5k crore in botched-up real estate project
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Another cheating case of the murky real estate world has come up before the Supreme Court bench of Justices Arun Mishra and Amitava Roy. On Wednesday (January 31) the bench issued notices to two Interlocutory Applications, one of them being interested in investing Rs 5,000 crore in the botched up project.

The Silicon City project is spread over 1,76,758 sq m and has around 5,000 flats, which were supposed to be completed by end 2013. But the builder is yet to complete civil work on seven towers. It has completed civil work on 21 towers and around 1,000 buyers have moved into unfinished flats.

The company — which has not just delayed delivery but is unable to clear Rs 550 crore dues with the Noida Authority too — is facing a default of Rs 155 crore against banks. Apart from BoB, Oriental Bank of Commerce (OBC) and Bank of Maharashtra (BoM) are the other lenders and did not give their consent to BoB to approach the NCLT. The Noida Authority had also opposed the initiation of insolvency resolution process.

On Wednesday the bench said that comprehensive pleadings are to be submitted. The portal should be available to all the homebuyers. It has also been prayed in the petition (by Bikram Chatterji) that the NCLT order be set aside. According to the Real Estate (Regulation and development) Act time till 2022 was given to complete the project.

The court said that in compliance to the order November 22, Rs 2,000 crore is to be deposited for homebuyers. This includes the Rs 71 crore insolvency initiated for recovery by Bank of Baroda.

Ten percent was to be deposited in accordance to order dated November 22, by the builder for installing fire fight equipment and make it functional.

Meanwhile, the bench was informed that a third party Investor was willing to invest Rs 5,000 crore, according to one of the IAs. He has said that his proposal be considered by the bench and by the homebuyers.

It was contented that middle class homebuyers’ interests might be affected if insolvency proceedings are initiated. For one, they might not be given possession and their homes, for which they are waiting might be disposed off to a third party. Also, the remaining 10-20 percent won’t be completed. Either way, the homebuyer waiting for possession will suffer.

The promoters have been barred from sending demand notices to homebuyers waiting for possession. The bench said: “You are cheating. Everyone wants the homebuyer’s money.”

The bench ordered that a comprehensive report be filed as regards to particulars of the status.

The next date of hearing is February 21.

–      India Legal Bureau

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