Stating that he has had as many as 30 meetings so far with homebuyers’ groups and even met Uttar Pradesh Industries Minister Satish Mahana this week, union housing and urban affairs minister Hardeep Singh Puri has said that there can be a resolution to buyers’ problems ‘soon’ if they unite to fight their battle against unscrupulous real estate developers.
"Homebuyers have a genuine problem - on that there is no doubt. Their issues need a solution, again on that there is no doubt. My heart goes out to them. Again on that most people would agree. Homebuyers have been duped. Many of them did not realise what they had got themselves into. There is an expectation that somebody will step in and solve the problem,” Puri told Moneycontrol in an exclusive interaction.
A resolution to their problems can be found “soon if they also insulate themselves from people who are spoiling their cases,” he said.
“The homebuyers would do themselves a great service to organise themselves and speak with one voice... I have had about 30 meetings with homebuyers... I had lunch with the UP industries minister Satish Mahana on Monday and I had the chief executive of the Noida Authority there. I make this submission before you that everyone who is anyone is committed to helping homebuyers but the homebuyers also have to organise themselves and lend a helping hand,” he told Moneycontrol.
Puri said that it may be difficult to fix a timeline as to when the problems will be resolved.
“We could fix a timeline if the homebuyers organise themselves into one group and they conducted the exercise through negotiations... land is a state subject. It has to be solved by the authorities of the concerned states which in this case means the government of UP and the government of Haryana. The Central Government wants to be part of the solution and that’s why I have been having these 30 meetings and I plan in the next few days to have more meetings.”
Three real estate cases are currently being heard by the Supreme Court. These include the Jaypee Infratech case, the Amrapali case and the Unitech case. Jaypee homebuyers, including one Chitra Sharma, had moved to the apex court, stating that around 32,000 people had booked flats and were now paying instalments. The plea had also stated that hundreds of homebuyers were left in the lurch after the National Company Law Tribunal (NCLT) on August 10 last year, admitted IDBI Bank's plea to initiate insolvency proceedings against the debt-ridden realty firm for defaulting on a Rs 526 crore loan.
Around 19,000 homes are delayed by Unitech, while the company owes Rs 723 crore to 51,000 fixed-deposit holders. Sanjay and Ajay Chandra, the managing directors of the company, are currently in prison in connection with a criminal case lodged by homebuyers of two of the company's projects in Gurgaon.
Last year, Bank of Baroda had filed an insolvency petition before the National Company Law Tribunal (NCLT) after Amrapali had failed to repay its loan. The move caused panic among homebuyers as, according to them, their investment would not be protected under the insolvency and bankruptcy code as the NCLT would give preference to banks before buyers. In September 2017, a group of homebuyers from Noida filed a plea in the Supreme Court seeking protection of their investment. In January, buyers in five other stuck housing projects in Greater Noida also filed similar pleas. The apex court clubbed all the pleas and is currently hearing the cases.
Puri also said that he would want to see the issues getting resolved “as early as possible” and that there were other issues that were of concern. “Substandard quality of buildings. Again that is something on which punitive action needs to be taken. Many builders have defaulted. Yes somebody has to step in. You can step in, provided you know whom you are negotiating with. And in my discussions with the minister of UP again we reiterated these points. We will also be taking concrete follow-up action in the days to come,” Puri said.
On being questioned whether homebuyers would have to take a haircut like bankers after being granted status of financial creditors post the amendments to the Insolvency and Bankruptcy Code last month, he said, “At the end of the day one has to look at what is reasonable. If I am left to myself, I will advocate that homebuyers interests be safeguarded fully. The easiest responsible position for me would be to say thank you very much solve your problems yourself. You had signed this contract I have nothing to do with it and it has nothing to do with voting for the BJP or against… You signed this contract when there was Mayawati and Akhilesh Yadav there [later], this kind of victimhood and populist politics is good but I think at the end the day the homebuyers are being let down because unscrupulous builders and irresponsible promoters are actually planting people who are speaking as so-called homebuyers.
"The genuine homebuyers, those who have invested their money, their hard-earned income need help. When I say that homebuyers need to organise themselves, the idea is that the genuine homebuyers will then be negotiating and the ones who are imposters or who are plants by the builders will fall by the wayside,” Puri told Moneycontrol.