Thursday 1 February 2024

Home Buyers Demand Homes Amid Vijay Group Housing Ltd Bankruptcy

300 Home Buyers Seek Intervention in Liquidation Proceedings, Insist on Receiving Promised Homes.

Thane: 01-02-2024

In a saga unfolding in the corridors of legal resolution, 300 home buyers who had invested in Vijay Group Housing Ltd's housing project at Vijay Estate Vakas in Neral Taluka Karjat, district Raigad, find themselves embroiled in a battle for their promised homes as the company faces bankruptcy.

The housing project, which commenced in 2015 with bookings for nearly 356 flats registered with the sub registrar in Karjat, has left investors in turmoil. With nearly 98% of the flat costs already paid and agreements formalized with the builder, Vijay Group Housing Ltd, the home buyers were eagerly awaiting possession by the promised date of October 2020.

However, their hopes were dashed as it came to light that the builder had allegedly diverted project funds, amounting to a staggering 103 crore rupees, into their own affiliated companies. This financial mismanagement ultimately led to Vijay Group Housing Ltd's bankruptcy, leaving debts unpaid to lender banks including L & T and Aditya Birla, who had collectively lent more than 200 crore rupees to the company.

In a bid to resolve the complex situation, ARCL, to whom L & T had sold its loan, initiated legal action by filing a case in the DRT and one creditor in National Company Law Tribunal (NCLT). The NCLT appointed a Resolution Professional (RP) to oversee the formulation of a resolution plan.

After 15 exhaustive meetings of the Committee of Creditors (COC), a resolution plan was finally submitted. However, initial assessments deemed the plan non-compliant with the Insolvency and Bankruptcy Code (IBC). Subsequent scrutiny by the RP reversed this decision, confirming the plan's IBC compliance.

Meanwhile, crucial licenses necessary for the continuation of Vijay Group Housing Ltd's business operations were not renewed by the RP, citing defects. This resulted in a memorandum of information reflecting the absence of the "going concern" status for the company in the resolution plan.

On December 16, 2023, the COC rejected the sole resolution plan submitted by PRA, citing inadequate returns against the lent amount. Consequently, the COC proposed and approved the resolution for the liquidation of Vijay Group Ltd's business.

Amidst these developments, the 300 home buyers have taken a resolute stance, demanding their rightful homes. As per the sale agreements, the builder has sold the flats to the home buyers, making them customers of Vijay Group Housing Ltd. Thus, the home buyers argue that their flats cannot be brought under liquidation.

In an effort to secure their homes, the home buyers have planned to intervene in the liquidation application filed by the RP, steadfastly advocating for their interests and demanding the fulfillment of their long-awaited homes.

The outcome of their plea for intervention remains to be seen as the legal battle ensues, leaving the fate of these home buyers hanging in the balance amidst the complex web of bankruptcy proceedings.

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