Over the past one year, homebuyers in India have filed hundreds of cases against defaulting real estate developers - builders who haven't been able to deliver homes have serious cash flow issues or are going bankrupt. However, most of these cases are pending before the National Company Law Tribunal (NCLT).
Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs, in a written reply to a question in Lok Sabha on Monday said that as per the information received from NCLT, a total of 1,821 cases filed by homebuyers against builders since June, 2018 under the Insolvency and Bankruptcy Code (IBC) 2016, were pending until about September 2019.
The government, he said, is taking all steps to strengthen the NCLT in terms of the number of benches, number of courts, and number of members, to reduce the burden of the cases filed.
"Five new benches have been announced during 2018-2019 at Jaipur, Cuttack, Kochi, Indore and Amaravati. The government has also appointed 28 more members in NCLT recently and vacant posts of members in NCLT are being filed up regularly. For capacity building of members, regular colloquiums are being held. e-Court project is also being implemented by NIC for all the benches of NCLT," Thakur said.
Meanwhile, the residential real estate sector continues to remain gloomy. Sales of housing units are falling across the country; so have new launches. A new report by real estate research and analytics firm PropEquity recently stated that sales of housing units fell 10 per cent across India's top nine cities to 52,885 units in the third quarter of 2019 versus the year-ago quarter. Sales fell nine per cent over the second quarter of 2019.
The nine cities include Gurgaon, Noida, Mumbai, Kolkata, Pune, Hyderabad, Bengaluru, Thane and Chennai. The biggest year-on-year drop in sales was witnessed in Chennai where absorption nosedived 25 per cent, followed by Mumbai at 22 per cent and Hyderabad at 16 per cent. Noida dropped 11 per cent. Sales, surprisingly, improved 7 per cent in Gurgaon and 1 per cent in Pune over the year-ago quarter.
The slowdown in housing sales is largely due to fewer new launches, lack of buyer confidence in older under construction projects and liquidity crunch in the market, the firm noted. On the positive side, PropEquity noted that 2019 has, thus far, performed better than 2018 in terms of projects getting completed. There is demand for ready-to-move in properties.