Allotment Cancellation and Refund
3 years ago
The possession of my flat was delayed by the builder for almost 2 years from the date of possession offered in BBA. Further the project went under NCALT and IRP was appointed. I have been asking for cancellation of my apartment since inception but builder had been stalling. Finally when i received the allotment cancellation letter the matter the matter was already under NCALT. Now the IRP states that refund will be processed through CIRP proceedings which i don't understand when will be concluded. While they have offered possession now, unfortunately, my financial position is not strong enough to take the possession. On the other hand I took a bank loan against this property which is already NPA from last one year. Bank says they can't go against the builder legally until the matter is out from NCALT. While i hold the allotment cancellation builder and IRP are not processing the refund and I am accruing interest and penalties on the loan. What can I do to get my invested amount back with due interest and penalties for the delay in offering possession by the builder or there is no way out?
Until the process of CIRP is completed there won't be solution to your issue. You can take the possession if possible and put it on rent or sale according to your financial standing. If not then you can submit your claim to the resolution professional and become a member of the committee of creditors of this company but you will get your share only when the whole resolution process is completed.
Ayantika Mondal @ Prime Legal
Responded 3 years ago
Until the process of CIRP is completed there won't be solution to your issue. You can take the possession if possible and put it on rent or sale according to your financial standing. If not then you can submit your claim to the resolution professional and become a member of the committee of creditors of this company but you will get your share only when the whole resolution process is completed.
Ankur Goel @ Complete Law Shield
Responded 3 years ago
this is fastest and this way you will save more.
else Bank have to take possession later and sell it by auction.
by auction, bank will get less and hence after deductions you will get less.
Hope this clarifies,
Advocate Ankur Goel (Complete Law Shield)
#YourLifeYourChoice
Gaurav Bhatnagar
Responded 3 years ago
Though the root cause is one, but your problem is manifold and need to be addressed point by point.
1) NCLT/NCLAT:
Firstly, in your query you have mentioned that the matter is before NCLAT i.e. National Company Law Appellate Tribunal, that means NCLT (National Company Law Tribunal) has already passed some order. There appears to be some discrepancy, try to get the correct status.
2) Secondly, you have said that IRP (Insolvency Resolution Professional) has been appointed that means the Company (builder) is under Resolution Process. The 1st step that IRP will take is to form a Committee of Creditors. Please note that as per definition you are a Financial Creditor to the Company thus if the formation of CoC is still under process, then joint the process (Ask the IRP).
3) Ask Bank whether they have joined the CoC as being NPA account they have entered into your shoes. If yes then, the Bank will get the amount as per approved Resolution Plan in CoC OR in the event the Company goes into insolvency then from the sale proceeds of the assets of the Company. If bank recovers in excess to your balance loan (principal + interest on recovery date) amount then will refund you the difference. You may ask them to give COVID period discount on interest as per the Govt. Circulars.
4) As per law the Resolution Process usually take 180 days (unless extended) and if failed then the Insolvency Process may also take further 180 days.
5) Earlier, you had an option to report the matter to RERA but it’s not appropriate now because during Resolution Process, all the legal actions/recoveries against the Company gets stayed. Still, you may try.
6) Best option with you either Joint CoC as FC (if possible) or follow up with the Bank about the status.
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