2017 (11) TMI 1796 - SC - Insolvency and Bankruptcy

Corporate insolvency process of builders/developers - buyers spent money in investing in the purchase of flats for which schemes were floated by the builders/developers - developer submitted that 90% flats are complete and ready for delivery in the first phase - HELD THAT - We are inclined to direct as follows (i) Respondent-builder shall deposit 10% of the dues of Respondent No. 7 before it within four weeks hence. (ii) The phase in respect of which Occupancy Certificate and No Objection Certificate, if granted, the possession of flats shall be handed over to the respective flat owners. (iii) The flat owners will be at liberty to complete the finishing work, if they feel so advised. (iv) The home buyers for whom the flats are not yet been constructed and are interested in refund, can submit their applications to the portal which is to be created by Mr. Pawan Shree Agarwal. (v) Mr. Pawan Shree Agarwal shall create the portal and inform the advocate-on-record for the Respondent-developer. The advocate-on-record for the developer shall give a sum of 5 lacs by way of bank draft to Shri Pawan Shree Agarwal so that he can meet the expenses. The directors, other than institutional directors, of the developer company shall remain personally present before this Court on the next date of hearing.

Summary

Issues involved:
1. Appointment of Amicus Curiae for home buyers in a real estate dispute.
2. Dispute resolution regarding completion and possession of flats.
3. Creation of a portal for refund applications by buyers.
4. Direction for depositing a percentage of dues by the builder.

Analysis:
1. The Supreme Court appointed an Amicus Curiae, Mr. Shekhar Naphade along with Ms. Shubhangi Tuli, to represent the home buyers in a real estate matter involving developers. The Amicus Curiae was granted liberty to interact with the Interim Resolution Professional (IRP) to safeguard the interests of the home buyers. This appointment aimed to ensure fair representation and protection of the home buyers' rights in the proceedings.

2. The Court addressed the issue of completion and possession of flats by directing the builder to deposit 10% of the dues of a specific respondent within four weeks. It was further ordered that upon the granting of Occupancy Certificate and No Objection Certificate, possession of flats in the respective phase should be handed over to the flat owners. The flat owners were also given liberty to carry out finishing work if deemed necessary, ensuring progress in the completion and delivery of the properties.

3. To facilitate the refund process for buyers interested in refunds due to non-construction of flats, a portal was to be created by Mr. Pawan Shree Agarwal. The Court mandated that buyers seeking refunds could submit their applications through this portal. This step aimed to streamline the refund process and provide a structured mechanism for buyers to claim their refunds effectively.

4. In a significant direction, the Court ordered the developer to deposit a specific amount with Mr. Pawan Shree Agarwal to cover expenses related to creating the portal for refund applications. Additionally, the directors of the developer company, excluding institutional directors, were required to be personally present before the Court on the next hearing date. This directive underscored the accountability of the developer and aimed to ensure compliance with the Court's orders regarding the refund process and overall resolution of the dispute.

Overall, the judgment focused on addressing the concerns of home buyers, ensuring completion and possession of flats, establishing a refund mechanism, and holding the developer accountable through specific directives and appointments.