NEW DELHI: The Supreme Court on Monday revived insolvency proceedings against real estate major Jaypee Infratech and gave its management control to the Interim Resolution Professional appointed by the National Company Law Tribunal, with immediate effect.
It also directed parent company Jaypee Associates to deposit Rs 2,000 crore with the registry to safeguard the interest of the home buyers.
The court asked Jaypee Infratech to hand over the records to the IRP for drafting a resolution plan indicating protection of interests of over 32,000 hassled home buyers and creditors.
It also stayed any other proceedings instituted against Jaypee Infratech for any purpose in any forum like the consumer commission, as IRP has been given control of the company’s management.
“We are not concerned about the interest of the company. We are only concerned about the home buyers, who are mostly of lower and middle-class strata. Home buyers need to be protected. It’s our duty and they should either get the money back or the flat,” a bench of Chief Justice Dipak Misra said.
The bench, which also comprised judges A M Khanwilkar and D Y Chandrachud, allowed Jaypee Associates to raise Rs 2,000 crore by selling land or properties and depositing it in the apex court registry by October 27. The court posted the matter for hearing on November 13.
The apex court also appointed senior advocate Shekhar Naphade as amicus curiae to assist the proceedings of the IRP, which will submit a resolution plan indicating how to safeguard the interest of home buyers and secured creditors.
It also restrained any person, who was part of the company when the Insolvency and Bankruptcy Code (IBC) started from travelling abroad, except for the representatives of IDBI, ICICI and SBI who were creditors of company.
Attorney General K K Venugopal, who was asked by the court to assist it in deciding a batch of petitions opposing the insolvency proceedings and seeking protection of the home buyers’ interests, said the stay on the insolvency proceedings be vacated.
He also showed concern for the interest of home buyers and said the IRP would get time to formulate the preliminary resolution plan.Senior advocate P S Patwalia, appearing for Jaypee Infratech, said it was committed to safeguard the interest of home buyers.
Additional Solicitor General Tushar Mehta, appearing for Insolvency and Bankruptcy Board, said that 627 units have been delivered to home buyers since the proceedings against the company began.
Senior advocate Abhishek Manu Singhvi, appearing for the IDBI, said once the insolvency proceedings begin, the company cannot be liquidated for 180 days.
He said the company has a debt of Rs 10,000 crore of which Rs 4,000 crore is of IDBI bank and in these 180 days, the IRP will take over the control and come up with a plan.The bench then asked IRP to submit a resolution plan on how the money can be given back to home buyers.
It said the main issue was that money or flat should be given to the home buyers and for that purpose, it can even attach the company’s properties.
Senior advocate Ajit Sinha, appearing for the petitioner Chitra Sharma and other home buyers, said it was a matter of 32,000 people who are now dying and paying the instalments for their flats.He said the court can attach the properties of the company like it did in the Sahara case and money should be realised and given to the home buyers.
Hundreds of home buyers have been left in the lurch after the NCLT, on August 10, admitted the 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.