With hundreds of home buyers left stranded, after the National Company Law Tribunal (NCLT) admitted bankers’ plea for initiating insolvency proceedings against Jaypee Infratech, for defaulting on a Rs 526-crore loan, the government has said that it is looking at ways to provide relief to home buyers. “We will discuss with the corporate affairs ministry if the bankruptcy code, provides any legal ground for sale of other assets of companies, to fund the completion of pending projects,” a finance ministry official said, on August 14, 2017.
He said an option being explored, is possibility of appointing a receiver or state agencies for completion of the incomplete projects, where home buyers had paid money to book flats, etc. “We may have to take the legal way through NCLT, which can pass an order to appoint an authority – maybe a state agency – to sell the assets of Jayee Infratech and with the money from sale of assets, the pending projects could be completed,” he said. Insolvency proceedings, he said, can continue simultaneously.
Last week, the Allahabad-bench of the NCLT admitted an insolvency plea of IDBI Bank, relating to the default of a loan of Rs 526 crores by Jaypee Infratech. It appointed Anuj Jain as the interim resolution professional (IRP), to carry out the proceedings under the Insolvency and Bankruptcy Code.
Jaypee Infratech, a part of the debt-ridden Jaypee Group, has defaulted on a Rs 526.11-crore outstanding loan to IDBI. Jaypee Infratech is into road construction and real estate business. It had constructed the Yamuna Expressway, connecting Delhi and Agra.
The biggest incomplete project of Japyee is the mammoth Wish Town project in Noida, on the outskirts of the national capital. The company has reportedly handed over only 5,500 flats out of the proposed 32,000 flats and 3,000 plots, across 800 acres along the Noida-Greater Noida Expressway. The project has 305 towers, of which 250 are incomplete.
Japyee Infratech is among the 12 big corporate loan defaulters, against whom bankruptcy proceedings have been initiated under a new law. Other companies against whom such proceedings have been initiated, include Bhushan Steel, Bhushan Steel and Power, Electrosteel Steels and Lanco Infratech, Alok Industries and Jyoti Structures.