HARERA judgement: Banks cannot auction project without the approval of buyers, authority : The Tribune India


Sumedha Sharma
Tribune News Service
Gurugram, September 18

Announcing a landmark judgement, Haryana Real Estate Regulatory Authority (HARERA), Gurugram has ensured, that no bank or financing agency would auction or sell a loan defaulting project to recover adjustment of allottees dues.

Chairman, HARERA Gurugram, Dr. K.K. Khandelwal said, that there has been a rampant increase of complaints in the state—in which a peculiar trend was noticed—where promoters mortgage their project, land or structure, as well as all receivables from the sold and unsold inventory to lend organisations or financial institutions, banks or creditors, in order to attain bank loans to fund the construction costs for developing the projects.

But when the promoters fail to repay the loans, then the financial insitutions, banks, or creditors, directly auction residential or commerical properties, that have been pledged with them to recover loans from borrowers by invoking the SARFAESI Act, 2002.

“Such auctions invoke great anguish and distress to the allottees of the project as there is no acknowledgement of the huge investments made by the allottees into buying their dream home. The future of such allottees is in complete darkness and obscurity. Such aggrieved allottees are bound to languish for their own hard-earned money. The latest judgement in interest of the allottees of the project “Supertech Hues,” is the first of its kind in the nation,” said Khandelwal.

According to HARERA judgement the promoter, M/S Supertech Limited, who is neither a licensee nor a collaborator, approached PNB Housing Finance Limited for a construction loan for the project “Supertech Hues”—which was advanced to M/S Supertech Limited, with

M/s Sarv Realtors Pvt. Ltd. as the confirming party, by way of equitable mortgage of the project land measuring 33.33 Acres, by deposit of the title deeds along with receivables from the mortgaged properties.

It failed to repay the loans taken and hence became a defaulter.

The said project was put for e-auction by the creditor company and allottees moved to HARERA.

“It’s happening across the country. The rights of the allottees are not subservient to those of the bank and therefore, in case of failure of the banks to ensure that the funds were applied for the purpose they were granted, banks cannot be allowed to supersede the rights of the allottees. The financial institutions/lending banks/creditors are duty bound to ensure that the loan payments are released to the promoters after due verification of the fact that the payment so released is actually utilized towards the construction of the project. The lending institutions, individuals shall be held equally responsible if the amount, so released, is not put into construction purpose and is allowed to be diverted,” added Khandelwal.  

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