Homebuyers who had invested in embattled real estate group Jaypee have sought a moratorium on their existing home loans and have written to the banks asking that EMIs should not be deducted till such time that a resolution was hammered out on the delivery of flats.
The banks, however, have said that they require the approval of National Housing Bank (NHB) before agreeing to it, lest the loans are classified as non-performing assets.
“…till the commencement of insolvency proceedings, there has not been a single default and all of us have serviced the loan regularly. We are all law-abiding citizens who have no intention of committing any default with regard to the home loan. However, in the peculiar facts and circumstances, it is only appropriate that there is a moratorium on the EMIs till the time there is any clarity on the entire issue and no penal interest is levied on the unpaid EMIs. Since matter is pending before the Honourable Supreme Court as well as before the NCLT, we are hopeful of an early resolution,” homebuyers, who had invested in Jaypee Infratech Ltd and Jaypee Associates, have written in a letter to banks.
“You are, therefore, requested to instruct your branches not to raise any further demand for the time being and keep the EMIs in abeyance and not to charge penal interest on the unpaid EMIs till there is some clarity on the issue of possession/refund with regard to the projects of Jaypee. Kindly do not treat the non-payments as defaults but only a necessary outcome of the peculiar circumstances and the present scenario,” they said in a letter written by their counsel.
Keki Mistry, vice chairman and CEO of HDFC said, "I don't know. Nothing has come to me yet. Also, for any moratorium, we need the NHB to approve it. Theoretically, even if we approve it, the NHB has to agree to it. Otherwise, we will have to classify it as NPAs."
Another senior executive from the same home loan company also refused receiving any such letter but remained optimistic on the resolution of the case. "The way it (case under the NCLT) looks currently, there are people interested in it and it should be resolved..."
Emails sent to ICICI Bank did not elicit a response. Calls made to the NHB chairman also remained unanswered.
The letter by homebuyers also goes on to state that Right to Information (RTI) response received by them revealed that loans were issued by banks even before the projects were sanctioned by Noida Authority “which is a contravention of RBI/NHB regulations. It is noteworthy that in this entire gambit, the homebuyers are the ones who have been caught between the lenders and the builder.”
“The homebuyers who were mere bystanders to this entire process and who bonafidely paid each and every financial demand raised by you and the developer at all times duly performing their obligations under the contract, are the ones who have been most severely prejudiced and punished without any fault. It is well known that the property at present is non-existent and it seems very clear that the developer is unable to either develop or deliver the proposed project,” the letter says.
"While you benefit from our regular payments of EMIs, we are left in the lurch and are forced to pay monthly EMIs for a property, which at the moment doesn’t even exist and also housing rentals,” it says.
“While some of us had no option but to stop paying the EMIs because of extreme financial burden of rents and EMIs, they run the risk of adverse effect on their CIBIL scores, which would disentitle them for any future loan. In fact many of us have started receiving legal notices and threatening calls from you for payment of EMIs,” it added.
On August 9 last year, the Allahabad bench of the NCLT had accepted lender IDBI Bank’s plea and admitted Jaypee Infratech as a case under insolvency resolution for defaulting Rs 526 crore. It appointed Anuj Jain as the insolvency resolution professional from BSSR & Co.
The SC ruling came after over 20,000 home buyers in the Jaypee Infratech’s projects raised concerns of not getting back their money as the first right of dues would go to the banks and other operational creditors. While some buyers have paid the full amount to the company, there are others who may have paid either 60 percent or perhaps 90 percent of the amount.
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