Delhi-NCR developer demands that a homebuyer complaint should be first drawn to RERA before NCLT.

Even individual homebuyers who take builders to bankruptcy court, demand by the rattling property developers of Delhi-NCR says that all consumer complaints by regulator RERA be heard before insolvency proceedings have been initiated.

According to CREDAI, around 450 real-estate companies/projects across the country face insolvencies under the Insolvency and Bankruptcy Code (IBC), due to defaults in the delivery of the homebuyers’ projects and repayment of bank loans.

Of these 450 cases admitted by the National Company Law Tribunal (NCLT), 80-85% is for builders who failed to give the possessions to homebuyers.

At the time of an Interview, CREDAI-NCR spokesperson Rohit Raj Modi told PTI, that “Although a single home buyer approaches the NCLT with complaints about developers of the property, their pleas are often admitted and this is turning into an epidemic.”

Investors and speculators file most of these cases, endangering the interests of real home-buyers that want to get possession of their homes, he alleged. “The government did not intend to do so by declaring homebuyers to protect their interests as financial creditors,” said Modi. He said that the insolvency law was misinterpreted. CREDAI-NCR Treasurer Prashant Solomon stated that RERA should be the first call point for grievances for any home buyers.

“As RERA exists, consumers must appeal first to RERA, and after the consent of two-thirds of homebuyers, they may refer it to NCLT,” he added.

The request of the Association comes from reports that the government plans to alter the IBC and to put certain thresholds for homebuyers in order to approach the NCLT.

CREDAI’s Modi said that “amendments should be enforced rapidly. Even an ordinance route should be considered.”

In September the Association wrote to the Prime Minister to seek the permission to cause IBC proceedings against the promoter by 2/3 of the allottees of a real estate project.

Modi said that most of the Delhi-NCR projects are positive in net worth, but are stuck due to huge liquidity crunch and poor sales.

One main reason for the slowdown in demand in the housing sector is a considerable delay in providing possessions to the homebuyers.

Lakhs of homebuyers have been trapped in housing projects launched by developers including Jaypee, Amrapali and Unitech. Promoters of many NCR-based real estate companies are imprisoned for failing to give home buyers possession.

Recently, President of Homebuyers body Forum for Peoples’ Collective Efforts (FPCE), Abhay Upadhyay said about five lakh customers are stuck across the country due to delayed projects.

The construction of nearly 2.2 lakh units worth Rs1.56 lakh crores, launched in 2011 and before in seven major cities, has not been completed by real estate developers as per the latest report by property consultancy JLL India.

According to the JLL report, the Delhi NCR (National Capital Region) Real Estate companies are the biggest defaulters, with 71% in volume and 56% in value in delayed housing units.

In April this year, Anarock, a Real Estate Consultant, published a report claiming that around 5.6 lakh residential units (worth Rs 4.5 lakh crores) had been launched in 2013 and around 7 major cities were running behind the delivery timelines.