Apex court stays demand notices issued by the developer to home buyers who have sought refunds.
The Supreme Court on Wednesday directed Jaiprakash Associates (JAL), the parent company of Jaypee Infratech, to deposit Rs 200 crore in two instalments by May 10 and also asked for a project-wise list of home buyers, who want refund of their money. However, it stayed all the demand notices issued by the developer to home buyers who have sought refunds.
JAL will have to deposit the first instalment of Rs 100 crore in the SC registry by April 15 and another Rs 100 crore by May 10. As of now, JAL has deposited `550 crore, out of a total amount of Rs 2,000 crore, as directed by the apex court last year, so as to cover part of JIL’s liability towards 31,000 homebuyers.
A bench led by Chief Justice Dipak Misra told JAL that “you can’t sit with the home buyers’ money. We are concerned with the home buyers… At present we are concerned with the refund of money and will later take up the issue of home buyers who want possession of their flats.”
It also asked amicus curiae Pawanshree Agrawal to prepare a project-wise chart of those seeking refund. Based on the chart, the principal amount will be disbursed on a pro-rata basis to those home buyers who have sought refund of their money invested in the real estate major’s 27 housing projects in the national capital region.
However, it made clear that though the portal created by the amicus curiae will continue to be operational, those who have registered for getting refund till Wednesday will only be considered for disbursal of money.
The bench also posted the matter for further hearing on April 16 so as to check if Rs 100 crore installment has been paid by JAL and also for passing the direction for refund of money to the home buyers on pro-rata basis.
The court also appointed counsel Gaurav Agrawal to participate in the meetings of the committee of creditors to “espouse the cause of home buyers and protect their interests” after senior counsel Shekhar Naphade expressed inability to do so.
JAL resisted any further deposit of money, arguing that only 2,800 buyers, which constitute only 8% of 31,000 home buyers, have opted for refund and the rest 92% want possession of flats. Counsel Anupam Lal Das, appearing for JAL, told the judges that the company wants to complete the project. Around Rs 1,300 crore is required to refund principle amount to 8% home buyers.
“I am pumping in money from my own pocket. Against a total collection of Rs 14,561 crore, I have invested Rs 15,500 crore in the project and that too when JAL is not in the insolvency. So far, we have given possession of 13,660 units and 500 flats will be delivered soon. If we are asked to deposit more money for refund to 8% homebuyers, the ongoing construction will come to a grinding halt,” he argued, while proposing to buyback the flats from homebuyers once the project is completed.
While observing that the bench is not satisfied with Das’ argument, the CJI said: “those who want refund has no avenues and we are concerned with them. Those who want flats can go with you.”
JAL, with a debt of nearly Rs 29,000 crore, featured in RBI’s second list of 28-30 companies to be taken to NCLT. JIL, whose total liability stands at Rs 1,575 crore, was among 12 companies against whom banks were asked by RBI to start bankruptcy proceedings in June last year.
The apex court had in November restrained all the 13 directors – eight independent directors and 5 promoter directors – of JAL and their “immediate and dependent family members” from transferring any personal assets or property without the court’s permission.
It had on September 11 restored the insolvency resolution proceedings against JIL and directed IRP to take over the “records and management” of the company.
Flat buyers had challenged the August 9 order of the Allahabad bench of the NCLT that admitted the IDBI Bank’s plea for initiating insolvency proceedings against the debt-ridden Jaypee Infratech for defaulting on a Rs 526-crore loan.