The Supreme Court on Wednesday directed Jaiprakash Associates (JAL), the parent company of Jaypee Infratech (JIL), to deposit Rs 1,000 crore by June 15 for refunding their homebuyers, failing which all the statutory proceedings will continue against the latter. However, it directed stay of the liquidation proceedings against JIL as it realised that such proceedings “will not help anyone”. Resolution professional (RP) Anuj Jain has also been asked to continue in the management, as per the SC order.
The stay order on liquidation and other statutory proceedings was necessitated in view of expiry of the statutory period of 270 days within which the RP should have finalised the resolution plan under the Insolvency and Bankruptcy Code of India, 2016. With Wednesday’s order, the RP and committee of creditors (CoC) of JIL, which is facing insolvency proceedings, can now ask the present three shortlisted bidders — Lakshadweep Investments & Finance (the highest bidder), the Adani Group and Cube Highways — to file revised bids so as to arrive at a viable resolution plan. As FE reported earlier, Lakshadweep, a joint venture between the Sudhir Valia-led Suraksha ARC and Dosti Realty, is willing to hike its bid.
The earlier bid by the firm was rejected by the lenders for it being too low and hardly covering the JIL’s liquidation value. While JAL in November was asked to deposit the Rs 2,000 crore in instalments so as to cover part of its subsidiary JIL’s liability towards 30,000 homebuyers, the company has so far deposited only Rs 750 crore with the SC registry.
A bench headed by Chief Justice Dipak Misra said that had it not been for homebuyers, it would not have entertained the petition. It also asked amicus curiae Pawanshree Agrawal to refund the principal amount on pro-rata basis to those homebuyers who have sought refund of their money invested in the real estate major’s 27 housing projects in the national capital region.
JAL resisted any further deposit of money, saying that it can’t deposit even a single paisa as it is under a master debt restructuring process and that will not be fair to its shareholders.
Counsel Anupam Lal Das told the judges that JAL is making a Rs 10,000-crore offer to pay all dues of lenders and also complete all the stuck housing projects as part of plans to bring its subsidiary out of bankruptcy. Asking the SC to consider its offer, he said that resolution process is over with the expiry of 270 days and not even a single bid has been found suitable. “The bar of Section 29(A) is over. Now let the resolution happen outside the code. Let RP and CoC consider my bid and a SC-appointed retired judge or anyone else oversee that there is nothing amiss in our implementation process,” he said.
However, RP, homebuyers and lenders including IDBI Bank opposed JAL’s offer. IDBI counsel Bishwajit Dubey argued that promoters are barred from bidding for their own assets and JAL can’t be trusted as of now. “Substantial amount needs to be invested. We have doubt if they have funds,” he said. Homebuyers represented by senior counsel Jayant Bhushan, Ajit Sinha and others also said that JAL can’t flout SC orders like this and they have no credibility left.
JAL, with a debt of nearly Rs 29,000 crore, featured in the Reserve Bank of India’s second list of 28-30 companies to be taken to the National Company Law Tribunal (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.