There is a good amount of confusion over the voting rights of home buyers in the renowned real estate giant companies like Jaypee and Amrapalidespite the Insolvency and Bankruptcy Board’s mandate. It had earlier mandated via a circularthat only those who have submitted claims to their properties shall have a right to vote as part of the electoral college (Committee of Creditors) in the key resolutions. The government had previously amended the Insolvency and Bankruptcy Code to treat home buyers as financial creditors so that they have a say in all crucial matters, the law mandates that those who abstain from voting will be deemed to have casted a negative vote. This clause is a problem in cases of home buyers as the decisions on new buyers require 66% affirmative vote.
For instance, in case of JaypeeInfratech, in order to pass a resolution two thirds of the Committee of Creditors who are the supreme decision making body has to vote in favour of it. According to sources, there were thousands of home buyers who had not submitted their claims in the first round. In the second-round, around 2000 home buyers had submitted claims. Some financial institutions had still not done so saying that their claims were submitted a year ago. To address this the Insolvency and Bankruptcy Board of India has mandated that only those who submit their claims shall be treated as an integral part of the Committee of Creditors. Since voting is open for a limited period this may be hard to achieve. Thus the solution lies in focussing mainly on affirmative votes.
Courtesy/By: Subhalagna Choudhury
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20 Sep 2018
