The apex court on Friday wanted the response of the government and two Amrapali Group firms shared on an appeal by over 100 hassled home buyers that their interests be safeguarded by treating them as secured creditors just like the banks and financial institutions.
A bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud issued notice to the central government and the Amrapali Group, asking them to respond within four weeks.
The home buyers, who have neither got delivery of their flats nor refund of their hard-earned invested money, had booked homes in the Amrapali Centurion Park-Low Rise project, Amrapali Centurion Park-Terrace Homes and Amrapali Centurion Park-Tropical Garden at Greater Noida in Uttar Pradesh.
The plan was to develop more than 5000 flats in approximately 40 towers in a phased manner. But it went awry.
The plea, filed by Bikram Chatterjee and 106 others, has sought quashing of a National Company Law Tribunal (NCLT) order passed on the plea of Bank of Baroda seeking initiation of insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 against Amrapali Silicon City Pvt Ltd.
Consumer and recovery cases and decrees passed by civil courts and consumer fora in favour of home buyers against real estate firms cannot be executed once insolvency proceedings begin at the NCLT.
The plea has sought that either the home buyers be treated on par with banks and FIs, or the provisions of the bankruptcy code, which give priority to lending institutions, be held ultra vires to the Constitution as being violative of fundamental rights like rights to equality and life.
The homebuyers, further pointed out that the terms and conditions contained in the agreement were "oppressive and unreasonable" as there was a clause for timely payment by the buyer, but no timely completion of the project. It claimed that the contract was heavily tilted in favour of builders as it allowed them to raise loan from any bank by way of mortgage of the flats being sold and buyers cannot object.
"Giving serious jolt to home buyers who have paid their hard earned money and life savings into funding the purchase of their dream homes, the Respondents 3 and 4 (Amrapali firms) were found in serious breach of their obligation to deliver the flats within 36 months, that is by 2013 and in some cases it is 2016," the petition said. No compensation for this failure to deliver the flats had been paid to the buyers, it alleged.