A Supreme Court bench of chief justice Dipak Misra and justices AM Khanwilkar and DY Chandrachud, on November 13, 2017, asked the directors of Jaiprakash Associates Limited (JAL) to appear before the court on November 22, 2017 and furnish details of their personal assets. It also appointed advocate Pawan Shree Agrawal, as amicus curiae and ordered the setting up a web portal, in order to enable the home buyers of Jaypee Infratech to register their grievances.
The apex court’s direction came in the wake of its September 11, 2017 directive to Jaypee Associates, to deposit Rs 2,000 crores by October 27, 2017, to protect the interests of home buyers and creditors. The court had on November 6, 2017, refused to allow the company to deposit to Rs 400 crores with its registry, as against Rs 2,000 crores as directed earlier.
At the latest hearing, the counsel for JAL informed the court that it was willing to deposit Rs 700 crores. The counsel for ICICI Bank, with whom the company has its account, opposed the statement of the group, saying the process of debt reconstruction of the company was going on and it would not be feasible to release the amount.
The bench had asked the firm to consider depositing at least Rs 1,000 crores by November 13, 2017, with its registry. It had also restrained the managing director and the directors of Jaypee Infratech Ltd, from travelling abroad without its permission and asked the parent company, Jaypee Associates, to deposit the money.
The top court had asked Jaypee Infratech to hand over the records to the IRP, for drafting of a resolution plan indicating protection of interests of over 32,000 hassled home buyers and creditors. It also stayed any proceedings instituted against Jaypee Infratech, for any purpose in any forum like the consumer commission, as the IRP had been given control of the company’s management. The court had allowed Jaypee Associates to raise Rs 2,000 crores, by selling land or properties and deposit them in the apex court registry by October 27, 2017. The court had also appointed senior advocate Shekhar Naphade as amicus curiae, to assist the proceedings of the IRP, which will submit a resolution plan indicating how to safeguard the interest of home buyers and secured creditors.
Additional solicitor general Tushar Mehta, appearing for Insolvency and Bankruptcy Board, had said that 627 units had been delivered to home buyers, since the proceedings against the company began. Home buyers including one Chitra Sharma had moved the apex court, saying that around 32,000 people had booked their flats and they are now dying and paying the installments. The top court had, on September 4, 2017, stayed the insolvency proceedings against the real estate firm at the National Company Law Tribunal (NCLT).
Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence, they can get back their money, only if something is left after repaying the secured and operational creditors, Sharma, in her plea, said. Hundreds of home buyers have been left in the lurch after the NCLT, on August 10, 2017, admitted IDBI Bank’s plea, to initiate insolvency proceedings against the debt-ridden realty company, for defaulting on a Rs 526-crore loan, the plea said.