The promoters of real estate companies — Unitech and Jaypee — faced a tough time in the Supreme Court on Monday. While the court refused bail to Unitech promoter Sanjay Chandra until he deposited Rs 1,000 crore in the court, Jaiprakash Associates, the holding company of Jaypee Infratech limited (JIl), faced stiff resistance from homebuyers and IDBI Bank over its proposal to mortgage toll collection of the Yamuna Expressway.
Chandra sought a four-week bail, promising he will meet each demand of the over 9,700 buyers, who are seeking refund of money or possession of flats. Amicus curiae Pawan Shree Agarwal presented a chart to the court showing 4,482 homebuyers desiring refund and 4,356 seeking possession.
Chandra roped in former Solicitor General Ranjit Kumar to press for his bail and argued that once he is out of jail, he could be subjected to any condition until he meets the demands of each homebuyer. Kumar said both his Managing Director and Executive Director are in jail and this has made it difficult for the company to negotiate deals to sell properties and obtain money.
The Bench of Chief Justice Dipak Misra, Justices AM Khanwilkar and DY Chandrachud remained firm that his bail can only be considered if he proved his bonafide by making a deposit of Rs 1,000 crore with the Court Registry. Kumar said he requires to come out to fulfil the condition. The Bench further proposed that where homebuyers seek only the refund with compensation, those flats could be auctioned and the money could be used for refund. According to amicus Agarwal, the total quantum of refund to be made is to the tune of Rs 1,865 crore. Kumar sought time till Monday for seeking instructions.
As regards homebuyers of Jaypee housing projects, the holding company Jaiprakash Associates limited (JAl) found it hard to push through its proposal of mortgaging the annual toll collection from Yamuna Expressway for a specified number of years in to raise Rs 2,500 crore committed by an undisclosed creditor. Both the counsel for homebuyers and IDBI Bank (that initiated insolvency proceedings against JIl) pointed out that the Yamuna Expressway is an asset of JIl which is under liquidation and presently an asset belonging to Interim Resolution Professionals (IRP) appointed to draw out an Action Plan. Also, the court was informed that on September 11, the JAl was required to make a deposit of Rs 2,000 crore with the court, the last date of which is October 27. This, according to them, was a ploy to defeat the court’s order.
The Bench directed Attorney General KK Venugopal appearing for the Centre, senior advocates Parag Tripathi for IRP, and ASG Tushar Mehta for Insolvency Board to respond to JAl’s application by October 25, the next date of hearing.