In a setback to the Jaypee Group, a Supreme Court bench headed by chief justice Dipak Misra, on August 9, 2018, set a limitation period of 180 days, to conclude the insolvency proceedings against Jaypee Infratech Ltd (JIL). The bench, also comprising justices AM Khanwilkar and DY Chandrachud, said the Rs 750 crores deposited by JIL in the apex court, shall be transferred to the National Company Law Tribunal (NCLT), Allahabad, which would deal with the proceedings.
The top court also allowed the Reserve Bank of India (RBI), to direct the banks to initiate separate insolvency proceedings against JIL’s holding company, Jaiprakash Associate Limited (JAL). The bench said home buyers should be included in the committee of creditors, in accordance with the amendments made in the Insolvency and Bankruptcy Code (IBC). The bench disposed of all the petitions and applications pending before it.
The apex court had earlier reserved its order on ‘interim reliefs’ sought by various stakeholders, including the home buyers of JIL, JAL, banks and financial institutions and the insolvency resolution professional (IRP). IDBI Bank had moved the Corporate Insolvency Resolution application before the NCLT, against the debt-ridden realty firm, JIL, after it allegedly defaulted in paying back a loan of Rs 526 crores.
The ASG had earlier said that, according to the amended IBC, now, home buyers are financial creditors in a firm. Hence, the committee of creditors, which usually included banks and FIs, will have to consider the views of home buyers, while deciding the resolution plan of a company. Lawyers, representing the home buyers, opposed the submission that JAL be allowed to complete the housing projects, saying that it was barred under the law to do so. Taking note of the enormity of the situation, the bench said it was thought that the liability of the firm was to the tune Rs 2,000 crores and it has now gone beyond Rs 30,000 crores.
Earlier, JAL had said it would deposit Rs 600 crores more, to refund the home buyers, if it was allowed to dispose of its identified assets, including a cement plant at Rewa in Madhya Pradesh. JAL had said Rs 750 crores had been deposited by it with the apex court’s registry and Rs 600 crores more would be required, for paying the principal sum to the home buyers. The home buyers had moved the apex court, stating that around 32,000 people had booked flats and were now paying instalments.