The Supreme Court, on October 23, 2017, said it ‘must be clarified’ whether the multi-crore, six-lane Yamuna Expressway, connecting Greater Noida with Agra in Uttar Pradesh, belonged to a Jaypee Group firm, which wanted to hive it off. A bench headed by chief justice Dipak Misra posed the query to Jaypee Associates, after the counsel appearing for IDBI Bank raised objection over the proposal to hive-off the 165-kilometre-long expressway, by the applicant firm.
The apex court was hearing a plea by Jaypee Associates, seeking its permission to hive-off the Yamuna Expressway, in order to generate money. Senior advocate Kapil Sibal, appearing for Jaypee Associates, told the bench that the company has a proposal worth Rs 2,500 crores for the property. The counsel appearing for IDBI Bank, opposed Sibal’s contention and claimed they cannot be permitted to hive-off the expressway, as the property does not belongs to the firm which has come before the court to seek its nod.
“It must also be clarified whether the property belongs to you (Jaypee Associates),” the bench, also comprising justices AM Khanwilkar and DY Chandrachud said. Sibal argued that the priority of the firm was the home buyers, who had booked flats in their housing projects and they wanted to help them. He said that the Rs 2,500 crores would be used, to complete the projects and hand over possession of flats to the buyers.
Meanwhile, the IDBI Bank contended that the group was earlier directed by the court to deposit money by October 27, 2017. The bench, after hearing the brief submissions, asked Sibal to hand over a copy of the proposal to attorney general KK Venugopal and posted the matter for hearing on October 26, 2017.
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, to pay off the troubled home buyers. Earlier, the Jaypee Group had told the apex court that the company needs to raise funds to deposit Rs 2,000 crores in the apex court registry, for paying the troubled home buyers.
The apex court had on September 11, 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 Interim Resolution Professional (IRP), appointed by the National Company Law Tribunal, with immediate effect.
The top court had also 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. The apex court, while passing slew of directions, had stayed any other proceedings instituted against the company 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 then said it was not concerned about the interest of the company but of the hassled home buyers, who mostly belong to the lower and middle-class strata.
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, one of the pleas filed by some home buyers said. Hundreds of home buyers have been left in the lurch after the National Company Law Tribunal, 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.