The Supreme Court, on July 4, 2018, suggested that realty firm Jaiprakash Associates Limited (JAL) should pay Rs 600 crores, instead of Rs 1,000 crores ordered earlier, to refund the principal amount to the hassled home buyers. A bench headed by chief justice Dipak Misra, asked senior advocate FS Nariman, representing JAL, to take instruction from JAL on depositing Rs 600 crores with the apex court registry. It said that after the amount was deposited, it would ask the National Company Law Tribunal (NCLT) at Allahabad, to expeditiously decide the firm’s plea on revival or restructuring of its subsidiary firm, Jaypee Infratech Limited (JIL).
The bench, which also comprised justices AM Khanwilkar and DY Chandrachud, had, on May 16, 2018, directed JAL to deposit 1,000 crores by June 15, 2018, in addition to Rs 750 crores already deposited, to provide refunds to the home buyers who had wished to opt out of its various housing schemes. “This case (of home buyers) can be disposed of, if they (JAL) deposit Rs 600 crores for refund of the principal amount. We will ask the NCLT to decide the company petition (of JAL),” the bench said. The court also made it clear that it would deal with the issue of refund of money, to only those home buyers who do not want possession of their homes.
On being informed that Rs 750 crores had already been deposited with the apex court and another Rs 600 crores would be required, to pay the principal amount to home buyers, the court asked the realty firm to ‘establish its bonafide’ by paying the money.
Lawyer Pawan Shree Agrawal, who is assisting the court as an amicus curiae, said the home buyers, registered with the portal for seeking refund, have to be paid Rs 1,379 crores and so far, Rs 750 crores had been deposited with the apex court registry, leaving a shortfall of almost Rs 650 crores, for refunding the principal sum to them. The court, however, did not record this aspect in its order and asked Nariman to take instruction from JAL and apprise it on July 13, 2018, the next date of hearing, about the company’s stand on depositing Rs 600 crores with it.
At the outset, Nariman said that as many as 17 proposals for reviving JIL had been rejected so far and JAL had entered into agreements with a bank, which had agreed to issue a letter of credit to the tune of Rs 1,000 crores, subject to certain conditions like mortgaging of properties. “I want a letter of credit from a bank, which would say that it will deposit Rs 1,000 crores, provided the NCLT disposes of the petition (of JAL) on revival of JIL,” Nariman said, adding that the NCLT had said it would do almost nothing, as the apex court was seized of the matter. The bench then asked JAL to deposit Rs 600 crores, saying it would ask the NCLT to decide its plea, as soon as possible.
Earlier, the top court had asked JAL to deposit Rs 1,000 crores by June 15, 2018, to provide refunds to home buyers and made clear that on submission of the amount, the liquidation proceedings against JIL shall remain stayed. It had also asked the amicus curiae to disburse the money to the home buyers, on a ‘pro-rata’ basis. JAL had said the company has been delivering possession of 500 dwelling units every month to home buyers and moreover, 92 per cent home buyers wanted possession of their homes.
Senior advocate Ajit Sinha, appearing for the home buyers including one Chitra Sharma, had said the court had directed the real estate firm to deposit Rs 2,000 crores and only Rs 750 crores had been deposited and hence, it was a case of non-compliance of the order. The home buyers had moved the apex court, stating that around 32,000 people had booked flats and were now paying instalments. The plea had also stated that hundreds of home buyers were 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 firm, for allegedly defaulting on a Rs 526-crore loan.