In its order, the Supreme Court said that if a real estate company defaults in loan repayment and is not able to give possession to homebuyers, then in these cases home buyers should get preference.
The court said that homebuyers should get priority over banks.
Supreme Court (Supreme Court) said that if any real estate (Real Estate) If the company defaults then the homebuyers (Homebuyers) should get priority over banks. The court said that if the real estate company is not able to repay the bank loan and is not even giving possession to the homebuyers, then in these cases home buyers should get attention. This decision of the court has given relief to lakhs of homebuyers. The government has made homebuyers a part of the Committee of Creditors in the Insolvency and Bankruptcy Code. The committee of creditors decides on the future of the defaulted company. However, he was not yet given preference in the matter of liquidation. Due to this, everything was looted when the builder defaulted. After the court’s decision, now homebuyers have got preference in liquidation as well.
A bench of Justices MR Shah and BV Nagaratna was hearing the appeal of Union Bank of India. Union Bank of India challenged the decision of the Rajasthan High Court. The High Court had said in its order that if a real estate company defaults and the bank takes possession of that property as a secured creditor, then the builder or promoter can complain to RERA. Union Bank had approached the Supreme Court against this decision of the High Court, which was rejected.
Banks are not covered under RERA Act
Union Bank of India says that banks do not come under the purview of the RERA Act, as they are not its promoters. In such a situation, if the bank recovers the loan in its own way, then RERA does not have the right to interfere. There is always a clash between homebuyers and banks when a real estate company is unable to complete the project on time and also defaults on loan repayments. After such incidents, both the bank and the homebuyers take recourse to the court.
Many options of loan recovery with the bank
Talking about the bank, it has many instruments for loan recovery. This includes laws like IBC i.e. Insolvency Act and SARFAESI (Securitization and Re-construction of Financial Assets and Enforcement of Security Interest Act). The Rajasthan High Court has said in its order that if a bank takes possession of a project on the default of the promoter, then the promoter can complain to RERA.