Insolvency: Builders seek protection from government | Noida News – NOFAA

Insolvency: Builders seek protection from government | Noida News


NOIDA: Builder’s body Naredco has urged the central government to take immediate steps to prevent the National Company Law Tribunal (NCLT) from admitting insolvency cases against builders for at least a year, citing Covid-impacted delays in completing the pending projects.
During last year’s lockdown, the Union government made some relaxations in the Insolvency and Bankruptcy Code to give builders protection from insolvency proceedings for six months. NCR has around 3.96 apartment units under construction at present, of which Noida, Greater Noida and Ghaziabad share over two lakh units.
“We have expressed our operational difficulties in a letter submitted to the Union finance minister. We have highlighted that operations at all levels are more or less suspended as the government offices from where various approvals and clearances are to be obtained, is functioning with very thin staff strength,” RK Arora, president, Naredco (Uttar Pradesh), told TOI on Tuesday.
While construction work at several project sites have resumed since June last year, the builders in their letter have mentioned that the speed of work has been hampered by “a disrupted supply chain that has set their construction schedules back by over six months”.
“Further, offices of the developers and others associated with the projects are also closed due to the lockdown and many employees becoming Covid positive. The disruption of construction has also brought the developers to a situation of serious liquidity crisis,” Arora said.
“Fresh bookings have been impacted, so we have requested that the Union ministry of finance & corporate affairs to intervene and once again introduce special measures to protect corporate entities from being dragged into insolvency by suspension of the applicability of sections 7, 9 and 10 of IBC for a period of one year,” he added.
As per a recent research by real estate consultants Anarock, a total of 5.66 lakh units were launched in Delhi-NCR from 2013 to date. Of these, 70% or some 3.96 lakh units are still under construction. “Of the total under-construction units in NCR, Greater Noida has the highest number at approx 1.12 lakh units, followed closely by Gurgaon with nearly 1.09 lakh units, Ghaziabad with more than 58,500 units and Noida with 42,500 units,” said Prashant Thakur of Anarock.
The buyers have, however, reacted strongly to the Naredco’s letter. “It is not our fault that the builders have not been able to keep the workflow in progress because unlike last year, neither factories nor construction activity has been stopped by the government this year,” said Abhishek Kumar, president of Noida Extension Flat Owners Welfare Association.

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