Supreme Court allows conveyance deeds for Parsvnath homebuyers in completed projects, partially unfreezes accounts
The Supreme Court on Thursday permitted conveyance deeds for allottees of completed Parsvnath Developers projects and partially relaxed a freeze on the firm's bank accounts to pay electricity charges and employee dues. The bench directed lenders to make funds available to the Resolution Professional
The Supreme Court on Thursday authorised the execution of conveyance deeds in favour of existing allottees of completed projects of the ailing real estate firm Parsvnath Developers. The bench, comprising Chief Justice of India Surya Kant and Justice Joymalya Bagchi, also partially relaxed its 13 July order freezing the bank accounts of Parsvnath Developers and its associated entities to facilitate the payment of electricity charges and employees' dues.
The court directed the lending financial institutions of the company, which is facing insolvency proceedings, to make adequate funds available to the Resolution Professional (RP) to meet these essential expenses. The bench took note of submissions by senior advocate Shayam Divan that the RP should be allowed to take steps to address the grievances of hassled homebuyers, but made clear that the permission must not be used to create any third-party rights in the properties.
The directions come as the bench examined the larger question of how to protect thousands of Parsvnath homebuyers, many of whom have been waiting for possession since 2005-07 amid the company's financial and insolvency-related difficulties. During the proceedings, the bench raised concerns over what it described as a "majoritarian asymmetry" in the committee of creditors (CoC), saying that the commercial interests of financial creditors could take precedence over the legitimate concerns of homebuyers. The bench indicated that a conventional insolvency resolution framework may not adequately address the vastly different circumstances of individual housing projects.
While some projects are reportedly 70-90 per cent complete, others lack basic infrastructure and essential amenities. Certain projects have allegedly been abandoned altogether or exist only on paper, a lawyer representing homebuyers told the court. The proceedings arose from a petition filed by Rita Tikku, a cancer survivor, and her husband Lokaish Tikku, who had invested their life savings in the Parsvnath Exotica residential project in Sector 53, Gurugram. The couple was allotted residential units in 2006, with a Builder-Buyer Agreement executed in early 2007. The total sale consideration was approximately Rs 1.78 crore and possession was contractually due within 36 months, by February 2010, though the court's July 13 order recorded February 2013 as the possession due date.
Despite making full payment, the petitioners allegedly did not receive possession, with construction remaining far from completion. The homebuyers subsequently approached Haryana RERA, which passed orders awarding compensation to them. These orders, which were not challenged by the builder, attained finality, the bench had said. However, the company allegedly failed to comply with the directions, neither handing over possession nor paying the awarded compensation. The bench later expanded the scope of the hearing as other home buyers also approached it. The Tikkus received their homes following the court's intervention.
