The land parcel of hapless homebuyers who are saddled with unfinished apartments at the Batanagar township will be a component of the area being put up for re-bidding, raising hopes of a long-awaited resolution.
The order delivered by the Calcutta bench of the National Company Law Tribunal stated that the form to seek expression of interest (EoI) for land assets of bankrupt Riverbank Developers Pvt Ltd (RDPL) will include ‘parcel 3’, where residential towers involving the fate of over 2,300 homebuyers are involved.
Parcel 3 relates to Hiland Green Phase II (towers 11-20), spread over a 12.33-acre area. According to the contention made by the homebuyers before the tribunal, Phase II is 80-85 per cent complete, and homebuyers have made 90 per cent of the payments to the developer.
The previous round of bidding had kept land ‘parcel 3’ only for the association of homebuyers. However, some of the homebuyers said they were not willing to take up the work of completing the project after making a bulk of the payment, but without getting delivery of the flats.
Land for the Batanagar township belonging to RDPL, which was dragged to insolvency by Canara Bank for loan default, was split into multiple parcels and put up for sale.
While one of the land parcels was picked up by the Ambuja Neotia group for ₹34 crore to complete its ongoing Usshar project, bids made by MKJ Enterprise (Keventer) and DTC Projects Pvt Ltd for other land parcels were rejected by RDPL lenders, prompting the tribunal to order a re-bid.
Taking note of homebuyers’ plea, the bench of judicial member Bidisha Banerjee and technical member Siddhartha Mishra observed that the criteria needed to be modified since the home buyers were not interested in participating in the resolution process as applicants.
“Hence, we direct the said criteria to be modified by keeping parcel 3 open to all alike
other parcels, namely, parcel 2, parcel 4 and parcel 5 to attract serious and credible bidders for submission of resolution plan,” the bench noted.
‘Homebuyers constitute separate class’
The bench said homebuyers “can not be forced to complete their own project incurring further expenditure and further liability”, — an observation which may have a ripple effect across similarly placed stalled real estate projects going through insolvency in India.
“Homebuyers constitute a separate class of creditors, and they may be afforded a treatment not different from other financial creditors in the CIRP (corporate insolvency resolution process).
“They are the class who have booked flats, having taken loans from banks and are already saddled with the liberty to repay their loans from their hard-earned money. They make payment for their flats only with the hope of getting possession of their flats for their residence.”
“Individual Homebuyers may have divergent views, but ultimately, they vote as a class, and if 253 homebuyers do not want to complete the project themselves, they cannot be forced to don the hat of a resolution applicant. If they do not have the wherewithal, they cannot be forced to complete their own project incurring further expenditure and further liability,” the bench wrote.