Storm Kicked up in Realty Market
According to a market researcher, a total of Rs 3,000 crore has been put at stake which comprises about Rs 900-1,000 crore of individual investors and rest between developers and financial institutions. The worst affected among the four namely — the builders, banks, investors and farmers — are middle class investors.
In the eye of a storm kicked up in the realty market following the Supreme Court order on Shahberi are the poor middle class investors. The Supreme Court order sent jitters among the lenders and financial institutions too. Noted financers like SBI, PNB, UCO, Allahabad Bank and others called an emergency meeting on Wednesday evening.
While it will be a daunting task for the investor to get back the money from the builder or developer, the bankers too will have to suffer since the borrowers who may not be able to return the money will have no option except to ask the bank to attach the property (most of which are on paper only) against which the loan or finances were taken.
Ajit Sinha, Director of leading financial consultants Investcare Private Limited, when asked on the fallout of the order said that when legal issues crop up all parties will approach the courts. “The developer and builders have the option of taking shelter under the clause Force Majeure. This is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties occurs. The builder can buy time and convince the investor to wait for some time in this situation. Since the matter concerns several parties, the prospect of a long protracted battle looms large, and in all this finally the poor investor has to suffer,” Sinha added.
According to a senior official of a nationalised bank the provision for lending money to a customer are very clear — the recovery has to be made from the loan applicant and he will be made the respondent no 1 in the recovery suits. Several banks that had financed the allottees in Noida Extension held an emergency meeting on Wednesday evening to chart out the further plan of action in this regard.
“We will recover our money. Be it from an individual borrower or developer. While applying the borrower should be clear on the legality of the property although we do necessary legal verification too but the liability is with borrowers,” said a top official of a leading PSU bank in the Capital.
From various sources it was also confirmed that just about 40 percent investors affected by the projects of Amrapali and Supertech have been given alternative housing options while the rest of the developers in Noida Extension and Greater Noida have nowhere to go.
Amid these issues, the refund of the compensation paid to farmers might prove a tricky proposition. Farmers of Shahberi have been paid handsome sums of money by GNIDA and almost all of them have used it in changing their life-styles. “They have made big houses and own swanky SUVs and have invested the rest in some other business of their own. The big question is how they will refund the money to the authority. Which is not possible now and no one has an answer,” said an executive of a leading developer requesting anonymity.
legality of the property, Noida, Noida Extension, Noida property, Shahberi village noida, Supreme Court order on Shahberi
