The Supreme Court today directed realty firm Jaiprakash Associates Limited (JAL) to deposit Rs 1,000 crore, in addition to Rs 750 crore already deposited, by June 15 to provide refunds to the hassled home buyers. On submission of the amount, the liquidation proceedings against Jaypee Infratech Limited (JIL), a subsidiary of holding company JAL, shall remain stayed, the top court said. The direction came from a bench headed by Chief Justice Dipak Misra when lawyer Anupam Lal Das, counsel for the JAL, said that holding firm JAL be allowed to revive its crisis-hit subsidiary JIL as its liquidation would neither be in the interest of creditors, nor in the interest of home buyers.
The bench, which also comprised Justices A M Khanwilkar and D Y Chandrachud, directed that in case of default in depositing the money by June 15, “the statutory proceedings against JIL shall proceed”. It then asked lawyer Pawan Shree Agrawal, who is assisting the court as an amicus curiae, to disburse money to the home buyers who wanted refund on a “pro-rata” basis. Senior advocate C A Sundaram, representing a financial institution (FI), said most home buyers have taken loans from banks and hence, it should be ensured that they pay refunded money to the banks only.
The court asked the banks, who have granted loans to home buyers of JIL, to send their representatives to discuss this aspect with the amicus to ensure that the disbursed amount goes to the FIs. At the outset, the counsel for JAL apprised the court about the present status of the insolvency proceedings against JIL and submitted that the holding firm’s resolution to revive the subsidiary was needed to be considered by the committee of creditors (COC).
“We have proposed the best revival plan and the liquidation of JIL is neither in the interest of creditors, nor in the interest of home buyers,” he said. The firm has proposed to offer 2,000 equity shares of JIL to each home buyer as part of its Rs 10,000-crore proposal to revive it, Das said. The lawyer said the company has been delivering possession of 500 dwelling units every months to home buyers and moreover, 92 per cent home buyers wanted possession of their homes.
“Please ask the Committee of Creditors to decide whether my (JAL’s) resolution plea for revival of the company (JIL) worth considering or not,” he said. Senior advocate Ajit Sinha, appearing for home buyers including one Chitra Sharma, said the court had directed the real estate firm to deposit Rs 2,000 crore and only Rs 750 crore has been deposited and hence, it was a case of non-compliance of the order.
The company, in its plea, had sought a direction for restraining the National Company Law Tribunal (NLCT) at Allahabad from proceeding further with the insolvency proceedings. It had also said that the handing over of the company to the “sole resolution applicant” will result in compromising the interests of home buyers, minority shareholders, employees and even the financial creditors of the company.
The apex court had on January 10 directed JAL, the holding firm of Jaypee Infratech Ltd (JIL), to provide details of its housing projects in the country, saying the home buyers should either get their houses or their money back. The home buyers had moved the apex court, stating that around 32,000 people had booked flats and were now paying instalments. The plea had also stated that hundreds of home buyers were left in the lurch after the NCLT, on August 10 last year, admitted the IDBI Bank’s plea to initiate insolvency proceedings against the debt-ridden realty firm for allegedly defaulting on a Rs 526-crore loan.