Supreme Court rejects Parsvnath Developers' homebuyer proposal, warns of high-powered committee

The Supreme Court dismissed Parsvnath Developers' proposal for handing over flats or repaying homebuyers, calling it a delay tactic. The bench warned it may appoint a High-Powered Committee if no acceptable proposal is filed, and denied the insolvency professional's request to operate a frozen bank

The Supreme Court on Tuesday rejected Parsvnath Developers' proposal for handing over possession of flats or repaying monies with interest to hundreds of homebuyers, saying it seemed like "another device" to delay proceedings. A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and V Mohana cautioned that unless a fresh proposal satisfying all claims is placed on record, it will be "constrained to appoint a High-Powered Committee for entrustment of all the responsibilities."

The homebuyers' claims relate to refunds, compensation for delayed possession, and non-execution of Haryana RERA orders. The court observed that state authorities, which should have protected homebuyers' interests, apparently conspired with the builder, which did not even follow orders from the Real Estate Regulatory Authority. The bench permitted the firm to file another proposal acceptable to homebuyers who have been waiting endlessly for their homes.

The court had earlier frozen the bank accounts of the real estate firm and its directors, and issued bailable warrants against the company's leadership after noting a 20-year struggle by senior citizens to secure possession of their homes. During the hearing, the bench denied a plea from the Insolvency Resolution Professional to operate one of the frozen accounts, despite the IRP having received 3,000 claims from homebuyers.

Parsvnath's counsel said the group, under its 24 housing projects, was to build 27,000 dwelling units, of which 24,000 have been sold and around 3,000 are yet to be offered for possession. The bench trashed the company's proposal to deliver possession within one year. "They have already suffered a lot," the CJI said, adding, "You deposit Rs 500 crore with the apex court registry. We will appoint a high-powered committee and then we will see."

The bench referred to the ordeal of Rita Tikku, a cancer survivor, and Lokaish Tikku, who invested their life savings in the Parsvnath Exotica project in Sector 53, Gurugram. Despite paying the full sale consideration of Rs 1.78 crore, with possession due in February 2013, they have been deprived of their home for two decades. The court noted that even ordering a CBI probe does not help the homebuyers, who are "running from pillar to post" despite having money decrees in their favour.