After RBI ordered banks to undertake insolvency proceedings against Jaypee Infratech, it became the first housing company to face such a situation. It may be recalled that RBI had ordered insolvency proceedings against 12 companies earlier. These companies had huge debts and they were unable to repay even their interest dues. While all companies will have the face the challenges of insolvency proceedings, the situation is more adverse in case of Jaypee Infratech because there are thousands of homebuyers associated with the company. The biggest question facing the homebuyers now is who will construct their homes if the company is facing insolvency proceedings.
Experts said that homebuyers have various options. For example, they can contact the National Company Law Tribunal (NCLT) and raise their claim. The NCLT is the agency appointed to undertake the proceedings under the Insolvency and Bankruptcy Code. Since Jaypee is a housing firm, the agency will try its best to revive the company. Thousands of investors have purchased flats in Jaypee projects and a revival would be the best solution in the case. However, if revival is not possible, the company will be liquidated by sale of its assets. Experts said the liquidation will not be useful for homebuyers, as they will not have the first right to stake claim to the sale of assets. Experts said that homebuyers should wait and watch and take legal help if needed.