Coming to the aid of thousands of homebuyers who have invested their hard-earned money in Jaypee housing projects, the Supreme Court on Monday directed the company to show bona fide by making a deposit of Rs 2,000 crore with its registrar by October 27. The court directed the payment to be made by a sister concern of the conglomerate, namely Jaiprakash Associates, as it is not part of the insolvency proceedings initiated against Jaypee Infratech.
The court even altered its earlier order of September 4 staying the insolvency proceedings by handing over Jaypee Infratech’s management control to the Interim Resolution Professional (IRP), appointed by the National Company law Tribunal, with immediate effect. The Bench, headed by Chief Justice Dipak Misra, said that the stay order was aimed to provide succour to the homebuyers. It went on to direct the IRP to devise a road map, an interim resolution plan, within 45 days, indicating how it intends to remedy the plight of 32,000 homebuyers.
The order from the court followed an appeal filed by IDBI Bank which initiated insolvency proceedings against Jaypee Infratech before the Company law Tribunal, Allahabad.
The court’s order was supported by the Centre represented by Attorney General KK Venugopal who argued that the stay order had indirectly placed thousands of homebuyers back into the lap of the company which had failed them.
He said that the IRP should be handed the records and management of the company.
The court directed the IRP to devise a scheme that can cater to the interests of homebuyers besides the interests of financial creditors before the next hearing on November 13. The Bench, also comprising Justices AM Khanwilkar and DY Chandrachud, appointed an amicus curiae (name undisclosed) to represent the interests of homebuyers at the IRP meeting while devising the scheme. Further, the court restrained the Managing Director and Directors of Jaypee firms - Jaypee Infratech and Jaiprakash Associates, from leaving the country without the consent of the apex court.
Jaypee counsel senior advocate PS Patwalia said, “We are fully committed to give a flat to each person and are willing to state that on record.” One group of homebuyers represented by senior advocate Ajit Kumar Sinha mocked at the statement being made by a company that claimed to be financially insolvent. The Bench asked the company to prove bona fide by making a deposit of Rs 2,000 crore with the apex court. Patwalia said that all his assets are under insolvency proceedings. The court directed the payment to be made by a sister concern of the conglomerate, namely Jaiprakash Associates, as it is not part of the insolvency proceedings.
The Bench put IRP in full control of Jaypee Infratech and as far as Jaiprakash Associates is concerned, gave the latter liberty to seek consent of the IRP to sell any of the company’s properties for depositing the Rs 2,000 crore.
Meanwhile, the Bench stayed all other proceedings pending against the two Jaypee firms before any court in the interest of working out quick relief for homebuyers. The order was passed after the IRP suggested that if proceedings before consumer forum or civil courts are allowed to continue, IRP will have no time other than defending these proceedings.