Any Jaypee resolution plan must provide for a separate escrow account as per RERA norms: Buyers

Home buyers of Jaypee Infratech projects have called for the intervention of the UP government in the insolvency proceedings currently on against Jaypee Infratech Limited as over Rs 16,000 crore of their hard-earned money has so far been invested in these projects. They have also demanded that any resolution plan should provide for a separate escrow account as per RERA norms so as to ensure that projects are completed as per the new timelines.

In a letter handed over to the three-member cabinet committee formed by the UP government to look into the problems of home buyers and issues facing developers, the home buyers said that the insolvency resolution process has been initiated against Jaypee Infratech Limited under the Insolvency and Bankruptcy Code 2016 that “has the potential of wiping out the life savings of the Jaypee home buyers if the UP government does not intervene in a meaningful manner to protect the interests of home buyers.”

“The UP government should make a representation to the insolvency resolution professional Anuj Jain and the Insolvency and Bankruptcy Board of India to ensure that any resolution plan for Jaypee Infratech Limited and Jaiprakash Associates Limited provides for creation of a separate escrow account to fulfill the liabilities of Jaypee Infratech Limited and Jaiprakash Associated Limited under the Real Estate (Regulation and Development) Act 2016 and the Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016,” the letter said.

Buyers also asked the committee to ensure that projects are completed on time and adequate compensation for delay in completion of the project is paid to the buyers. They also called on the Insolvency and Bankruptcy Board of India and the Central government to issue a clarification that Jaypee buyers are secured financial creditors of Jaypee Infratech Limited.

The letter said that most of the homebuyers have been waiting for the last seven to eight years to get possession of their flats despite having paid up 80 percent to 90 percent of the total amount to the builders concerned.

"The ministers heard our problems and assured us that a resolution to the problem will be found soon,” said Devendra Yadav, a homebuyer who has invested in a Jaypee project.

Industries minister Satish Mahana, urban housing minister Suresh Khanna and state minister (independent charge) of cane development and sugar mills Suresh Rana are the members of the committee that has been meeting home buyers that have invested their hard-earned money with builders such as Amrapali, Jaypee, Unitech, Urbtech among others in projects in Noida, Greater Noida and Ghaziabad. The three-member cabinet committee had been formed on the directions of Uttar Pradesh chief minister Yogi Adityanath—to address issues being faced by home buyers.

vandana.ramnani@nw18.com