Banks can’t Seize Buyers’ Flats for Developer’s Default: West Bengal

Significant Judgment by West Bengal Real Estate Appellate Tribunal

The West Bengal Real Estate Appellate Tribunal has delivered a significant judgment protecting homebuyers from bank recovery actions in real estate projects. The case involved nine apartment owners in the Ideal Exotica project in New Alipore who faced losing their homes due to developer Ideal Real Estates’ loan default to Yes Bank.

Details of the Case

Yes Bank, seeking to recover a Rs 320 crore loan, attempted to seize the flats, valued between Rs 1.95 crore and Rs 3.14 crore each, through the SARFAESI Act, despite the buyers already occupying them and having completed property mutations.

Legal Proceedings and Outcome

The homebuyers appealed to the West Bengal Real Estate Regulatory Authority (WBRERA), which ruled in their favor. Yes Bank challenged this ruling, but the Appellate Tribunal upheld WBRERA’s decision, preventing the bank from taking possession or auctioning the flats.

Implications

This landmark decision establishes a crucial precedent, safeguarding homebuyers’ interests against aggressive loan recovery tactics by financial institutions.

 

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Source: https://realty.economictimes.indiatimes.com/news/residential/banks-cant-seize-buyers-flats-for-developers-default-west-bengal-tribunal/117665250

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