The Homebuyers can now take a sigh of relief, as the Hon’ble Supreme Court of India in one of its landmark judgment has upheld their position as Financial Creditors of the Builder Company. As a consequence of the same, insolvency proceedings against many builder companies is evident.
ABOUT INSOLVENCY PROCEEDINGS
In a recent development, “Today Homes Noida Private Limited” has gone into insolvency as ordered by the Hon’ble National Company Law Tribunal, New Delhi (NCLT) vide its order dated 20.08.2019. In the said matter, the aggrieved home buyers had approached the Hon’ble NCLT as the project was delayed way beyond a reasonable time period. That the Hon’ble NCLT after taking into cognizance the delay, harassment and the inability to complete the project by the builder initiated the Corporate Insolvency Resolution Process (CIRP) against the Builder Company, directing the Interim Resolution Professional (IRP), so appointed, to invite the claims from the Creditors of the Company.
The IRP has already invited the claims from all the financial and operational creditors of the Company, including the home buyers, vide public announcement through newspapers and online media; which have to be filed in a time period of 14 days. As a matter of direction, the IRP will now form the Committee of Creditors of the Company, including the highest stakeholder from both Financial and Operational Creditors, who will be a part of the major decisions being taken for the Company. The IRP will be heading all the operation and after the accumulation of the claims will decide the net worth of the company, which either will be taken over by some other company by paying off all the creditors of the company or will sell off the assets of the company for the purposes of settling all the claims.
However, as a matter of right, the claims can be filed before the Resolution Process will be closed, but in the same case, the Creditor cannot become a part of the COC without filing the claim. Further, it is poignant to mention herein that only the creditors who will file their claim will get their resolution and thus the need of the hour is to file your claims with immediate effect.
HOW TO FILE CLAIM?
For the purposes of filing claim, you either need to be a Financial Creditor (which includes Homebuyers) or an Operational Creditor of the Company. For a Financial Creditor who is Homebuyers Form CA (with the declaration in a duly notarized format) along with all the requisite documents of payment, the proof has to be filed before the IRP, whereas Form C is required for other financial creditors. Form B shall be filed by Operational Creditor.
STEP BY STEP PROCESS FOR FILING CLAIM FOR A FINANCIAL CREDITOR (HOME BUYERS)
- Gather all the payment proofs for the working of the computation of the claim. The Claim will be calculated along with an interest, which was being charged by the builder for the delayed payment, for every payment made by the home buyer to the Builder.
- The prescribed format of FORM CA has to be filed giving all the details of the home buyer and the unit purchased from the builder along with the computation of the claim.
- All the relevant documents supporting your claim and the fact that you are a Financial Creditor of the Company with proofs have to be annexed to the form. For example, the documents should include the Builder Buyer agreement, the allotment letter, the payment receipts, the statement of accounts issued by the builder, bank statement showing the payments made to the builder, in case of loan- the tripartite agreement, the loan sanctioning letter, the loan account statement, cancellation letter or any order from any court of law, if any.
- Copy of PAN Card and Adhaar Card should also be annexed.
- As a last step you FORM CA should be duly notarized from any notary. In case, the home buyer is residing abroad, the FORM CA should be duly notarized from the Indian Embassy of the country of residence.
- After the FORM is notarized and the documents are annexed, the claim should be filed before the IRP on the available website or e-mail address in a scanned format.
Disclaimer – The above articles based on personal interpretation of the related laws and court proceeding. It has been published to guide the general public. The readers are expected to take expert advice before placing reliance on this article. The author may be reached at firstname.lastname@example.org