'Home-buyers cannot be defrauded of hard-earned money'

The Supreme Court on Tuesday directed the Union and state governments to ensure steps are taken to complete the stalled housing projects in a time-bound manner as mandated under the Real Estate Regulation and Development Act, 2016, saying the home-buyers cannot be defrauded of their hard-earned money and life-long savings.

A bench of Justices Arun Mishra and Uday Umesh Lalit pointed out Section 53 of the Insolvency and Bankruptcy Code, 2016 is “irrational and violates the rights of the home buyers guaranteed under Article 21 by subjecting the home buyers to the liquidation proceedings of discriminatory nature” and treating them as ordinary financial creditors.

“The very survival of home buyers has been seriously jeopardised. Not only they are going to lose the entire money with accrued interest, but they will also become financially crippled for all time to come even close to the dream of a new home, let alone purchase it. There is no equal protection under the Insolvency and Bankruptcy Code, 2016,” the bench said, adding the provisions of the special law RERA should prevail to protect the home-buyers.

The top court ordered the cancellation of RERA registration of Amrapali group of companies and money laundering probe against the officials of the real estate companies as it diverted thousand of crores collected from 42,000 home-buyers and failed to deliver them flats in Noida and Greater Noida area, adjoining Delhi.

“It is a shocking and surprising state of affairs that such large-scale cheating has taken place and middle and poor class home buyers have been duped. Bank has made payment to the builder, owners have the liability of making payment of amount with interest, home buyers are still waiting for their dream houses to be completed,” the court said.

Justice Mishra, who wrote the 270-page judgement on behalf of the bench on a batch of writ petitions filed by the home-buyers, said, “This is not only with respect to the Amrapali builders. More than 70% of the projects in Noida and Greater Noida have not been completed which were initiated way back in the year 2008-09 and were supposed to be completed within three years.”

Among a slew of directions, it appointed the National Buildings Construction Corporation Limited to complete the various projects and hand over the possession to the buyers. It also ordered the Institute of Chartered Accountants of India to initiate the appropriate disciplinary action against Anil Mittal, CA for his conduct as reflected in Forensic Audit.

It rejected a plea by Noida and Greater Noida Authorities as well as banks, saying they will have no right to sell the flats of the home buyers or the land leased out for the realisation of their dues, which should have to be recovered from the sale of other properties that have stood attached.