Jaypee case: SC leaves homebuyers disappointed

at 7:18 pm
Supreme Court (File photo)

New Delhi (NVI): Nearly 20,000 buyers of flats in Noida in Uttar Pradesh were today left disappointed and disheartened as the Supreme Court remanded the Jaypee Infratech case back to the Committee of Creditors (CoC) and directed return of Rs 750 crore deposited by Jaypee Infratech’s parent company, Jaiprakash Associates.

After keeping its order reserved for over 5 months, the Supreme Court also said the Insolvency Resolution Professional (IRP) of Jaypee Infratech can invite modified or fresh resolution plans only from state-run NBCC and Suraksha Realty.

This is another setback for the homebuyers as NBCC had already been selected, through a vote by the creditors and approved by the NCLT, for undertaking construction of flats in Noida on the outskirts of Delhi, after the Jaypee Infratech left the projects high and dry.

NBCC was chosen over Suraksha Realty in the bidding process in November 2019 for completing around 20,000 flats after Jaypee Infratech defaulted on building these.

The Supreme Court today directed the Interim Resolution Professional to complete insolvency proceedings in 45 days.

“We direct the IRP to complete the CIRP (Corporate Insolvency Resolution Process) within the extended time of 45 days from today … It is made clear that IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum,” the top court said.

The resolution plans should be submitted in two weeks, it said.

“The applicants shall be expected to proceed on the basis of the information memorandum already issued by the IRP and shall also take into account the facts noticed and findings referred in this judgment,” the court added.

After receiving the resolution plan, the IRP will take steps to complete the voting process of Committee of Creditors (CoC) and the report submission to the adjudicating authority within the extended period of 45 days.

The court said the adjudicating authority will take final decision.

The Supreme Court also gave relief to business group Jaypee Associates by ordering that the Rs 750 crore deposited by it should be returned to the company and that NBCC would not be allowed to utilise it for construction.

The amount was part of Rs 2000 crore, which the Jaypee Associates, the holding company of Jaypee Infratech, was earlier ordered to deposit to enable NBCC to complete the pending 20,000 flats.

The Supreme Court’s order left the homebuyers shocked and disappointed as they were expecting a go-ahead for construction of the flats which they have bought with hard-earned white money. Most of the homebuyers are middle class people who have invested their life earnings or availed of loans, for which they continue to pay EMIs.

Most of the homebuyers have already made payments up to 90-95 per cent of the cost of a flat, which is 50 lakhs and above.

The homebuyers are back to square one, even three years after the legal processes which seem to have no end in sight.

The homebuyers question whether the judiciary is deliberately helping the rich business group against the helpless common middle class people.

“Why are we being punished? After the Central and UP governments refused to intervene to ensure we get our flats, we had hopes from the judiciary but even the top court of the country is letting us down,” said Ajay Kumar, who has bought a flat in Jaypee Wish Town for Rs 53 lakh and has already made payment of Rs 45 lakh.

He has availed of bank loan for the purchase and continues to repay it with interest.

“This is happening in India at a time when our Prime Minister is saying that there should be housing for all. Here, we have purchased flats with our own honest money but still are running from pillar to post to get the possession for the last decade,” Kumar said.

Our case runs just contrary to Prime Minister Narendra Modi’s push for ‘Housing-for-all’, he added.

“We have lost faith in the system. There is no trust now,” said Sanjeev Sahani, another homebuyer who has been waiting for a flat which he booked a decade back.

“It is frustrating and a waste of time and money. What wrong have the homebuyers done in buying the property,” he asked.

“We have had enough of rounds of voting and we are back to square one. Let our money, which was siphoned off by the promoter (Jaypee Associates) be returned to us and allow us to complete the projects ourselves,” he added.

The Supreme Court had earlier on October 8 last year reserved its judgment over a batch of petitions and appeals filed in the matter.

On August 6, 2020, the top court had transferred to itself the appeals pending before the National Company Law Appellate Tribunal (NCLAT) against the NBCC plan to acquire debt-ridden Jaypee Infratech and construct over 20,000 pending flats. The top court had said then that all appeals before NCLAT and the apex court would be heard together to avoid further delay.

NBCC had challenged modifications made by the NCLT in the original resolution plan submitted by it and as approved by the Jaypee Infratech Ltd. (JIL)’s CoC.

The NCLT had on March 3 last year given a go-ahead to NBCC to acquire debt-ridden Jaypee Infratech through an insolvency process and complete more than 20,000 pending flats over the next three and half years.

The tribunal had also ordered that Rs 750 crore be deposited by Jaypee Infratech’s parent firm Jaiprakash Associates with the Supreme Court registry, would be part of the resolution plan.

Jaypee Infratech went into an insolvency process in August 2017 after the NCLT admitted an application by an IDBI Bank-led consortium.

In December 2019, a CoC comprising 13 banks and around 21,000 homebuyers approved NBCC’s resolution plan with 97.36 percent votes in favour. The proposal was approved by the lenders in the third round of bidding process to find a buyer for Jaypee Infratech.

In its bid, the NBCC had proposed to complete over 20,000 pending flats in housing projects launched by Jaypee Infratech in Noida and Greater Noida (Uttar Pradesh). Homebuyers’ claim amounting to Rs 13,364 crore and lenders’ claim worth Rs 9,783 crore were admitted.