The Supreme Court on Monday asked Jaiprakash Associates (JAL), obligated to cover part of its arm Jaypee Infratech’s liability towards 32,000 homebuyers, to deposit “a substantial amount such as Rs 1,000 crore” with the court’s registry by November 13 to prove its bona fides. Rejecting JAL’s plea that it be allowed to deposit Rs 400 crore first and the rest in parts towards the Rs 2,000 crore it was asked by the apex court earlier to pay by November 5, a bench led by Chief Justice Dipak Misra said: “It must be a bona fide exercise where a sizeable amount is submitted. First deposit the amount, and then we will discuss any further.” The real estate firm had rushed to the top court, saying no company possessed such a huge amount of “liquid” funds (Rs 2,000 crore). JAL counsel Anupam Lal Das told the court that the company had raised over Rs 400 crore and would raise Rs 300 crore every month to pay off the due amount starting January 2018. He said that shareholders’ consent would be needed to sell the assets of the group to raise money. Earlier on October 25, the Supreme Court while rejecting JAL’s proposal to hive off its multi-crore Yamuna Expressway toll asset rights to generate Rs 2,000 crore had extended time till November 5 to deposit the money. The court had on September 11 asked JAL to deposit Rs 2,000 crore with its registry by October 27 to protect the interests of flat buyers. It had also asked the group to take approval of the insolvency resolution professional (IRP) appointed by the National Company Law Tribunal (NCLT) before selling any property and restrained the directors and managing directors of Jaypee Infratech and JAL from travelling abroad without its prior permission.
The SC had also restored the insolvency resolution proceedings against Jaypee Infratech and directed the IRP to take over its “records and management” and submit within 45 days an interim resolution which should safeguard interests of “low- and middle-income homebuyers” who have invested in the real estate major’s 27 housing projects in the national capital region.
Flat buyers had challenged the August 9 order of the Allahabad bench of the NCLT that admitted IDBI Bank’s plea for initiating insolvency proceedings against Jaypee Infratech for defaulting on a Rs 526-crore loan. While initiating the liquidation proceedings under the Insolvency and Bankruptcy Code of India, 2016, the tribunal had appointed the IRP to carry out the proceedings as the board of directors of the company would remain suspended.
Last week, the IRP had invited companies, investment firms and fund houses with a net worth of over Rs 1,000 crore to complete the delayed projects, including in Noida’s Wish Town, by infusing Rs 2,000 crore. Jaypee Infratech was among the 12 companies against which the Reserve Bank of India had asked banks to file insolvency petitions in June.
The court had 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 homebuyers and secured creditors. Additional solicitor general Tushar Mehta, appearing for Insolvency and Bankruptcy Board, had said that 627 units have been delivered to buyers since the proceedings against the company began.