The Supreme Court, on October 25, 2017, refused permission to the embattled Jaiprakash Associates Ltd, to hive-off its rights in the multi-crore, six-lane Yamuna Expressway connecting Greater Noida with Agra in Uttar Pradesh. The apex court, however, extended the time, from October 27, 2017 to November 5, 2017, for the company to deposit Rs 2,000 crores. “We are not inclined to entertain the application for modification of the order dated September 11, 2017. However, we extend the time to deposit the sum of Rs 2,000 crores, till November 5, 2017,” a bench headed by chief justice Dipak Misra said.
Jaiprakash Associates Ltd (JAL) had approached the apex court, seeking to hive-off the rights of Yamuna Expressway and modification or recall of a September 11 order, relating to deposit of Rs 2,000 crores. The bench, also comprising justices AM Khanwilkar and DY Chandrachud, disposed of the application and said it will deal with issue of home buyers seeking flats at a later stage.
Senior advocates Kapil Sibal and Mukul Rohatgi, appearing for JAL, said the company may be permitted to transfer its rights under the concession agreement, in respect of Yamuna Expressway. The prayer of the company was opposed by attorney general KK Venugopal and senior advocate Abhishek Manu Singhvi, appearing for IDBI Ltd.
Senior advocate Parag P Tripathi, representing the interim resolution professional (IRP), also opposed the submission of JAL and said the rights under the concession agreement in respect of Yamuna Expressway, are of Jaypee Infratech Limited (JIL), which is subject to proceedings under the Insolvency and Bankruptcy Code and therefore, cannot be transferred. Similarly, advocate Ravinder Kumar appearing for Yamuna Expressway Industrial Development Authority (YEIDA) also submitted that the rights under the concession agreement were non-transferable.
The top court observed that it was easy to ensure that flat buyers get their money refunded from the errant builders, rather than getting their flats from them. “Till now, home buyers who were on the streets and were moving from one forum to the other for possession of flats, are now getting their money refunded after we started taking up their cause,” the bench said.
At the outset, Sibal said the company had an offer from a Singapore-based firm, to hive-off the expressway at a cost of Rs 2,500-3,000 crores. “We need money to pay the home buyers. This company, which is running four highways in the country, has given us an offer. This is a reputed Singapore-based company. To hive-off, we need permission of the court, as per earlier orders,” he said.
Sibal contended that interest of all financial creditors were secured, as the company has assets worth Rs 17,000 crores, which even on distress sale would fetch Rs 14,500 crores. “We have a loan liability of only Rs 9,000 crores and by selling of the properties, we can easily pay the financial creditors,” he said. “Allow us to hive-off the properties, or else both, the companies Jaypee Infratech and Jaiprakash Associates Limited, will fall,” he said.
The apex court had, on September 11, 2017, directed Jaypee Associates, the parent company of Jaypee Infratech, to take prior approval of the court, if it wished to sell any asset or property to raise funds to the tune of Rs 2,000 crores to be deposited by it in the apex court registry, by October 27, 2017, to pay off the troubled home buyers. The apex court, while hearing a plea of home buyers of Jaypee’s Wish Town project at Noida in Uttar Pradesh challenging the insolvency proceedings initiated against Jaypee Infratech, had restricted the directors of firm from leaving the country.
It had revived insolvency proceedings against Jaypee Infratech Ltd and given its management control to the IRP, appointed by the National Company Law Tribunal with immediate effect. It had asked Jaypee Infratech to hand over records to the IRP, for drafting a resolution plan, indicating protection of interests of over 32,000 hassled home buyers and creditors.