NCLAT Rejects Jaypee Infratech's ₹15 Crore Interest Claim On Funds Deposited By JAL For Homebuyers

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Tuesday dismissed a plea by real estate company Jaypee Infratech Ltd. (JIL) seeking interest of Rs 15 crore on nearly Rs 546 crore deposited by its parent company, Jaiprakash Associates Ltd. (JAL), for the benefit of homebuyers during JIL's insolvency proceedings A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra noted that in its earlier judgment on August 28, 2023, it had already ruled that the Rs 750 crore, along with interest earned, belonged to JAL, and set aside the NCLT's direction to pay any interest to JIL. Therefore, it held that JIL is not entitled to any further interest merely account of delay in payments. The tribunal said, "This Tribunal has already vide its judgment dated 28.08.2023 has finally decided that amount of Rs.750 crores along with interest accrued is the assets of JAL and the direction of NCLT to give proportionate interest on the entitlement of JIL was set aside. The order of this Tribunal dated 28.08.2023 has become final." The dispute goes back to August 2017, when insolvency process was initiated against JIL by NCLT Allahabad on an application by one of its financial creditors. Meanwhile several homebuyers approached the Supreme Court for protection of their Rights citing delays in possession of properties developed by JAL. The court ordered JAL to deposit Rs 2,000 crore to safeguard homebuyers, of which Rs 750 crore was deposited. The money was meant to cover the claims of the homebuyers along with its interest. This money, along with interest earned, was kept with the NCLT until further orders. Later, JIL and JAL approached the NCLT for the release of the deposited funds. In March 2023, the NCLT ordered Rs 265.21 crore to be released to JIL, part of its total entitlement of Rs 542.62 crore, along with a direction for proportionate interest, which was later set aside. Following the NCLAT's August 2023 judgment that the Rs 750 crore and all accrued interest belonged to JAL, JIL received the remaining Rs 277.41 crore of its principal entitlement in February 2024 In its latest plea, JIL asked for interest on the delayed release of funds, claiming it was entitled to the interest earned on the amounts from the date of the NCLT order to the date of actual payment. JAL and the NCLT Registry opposed the plea, saying that all funds and accrued interest had already been released as per tribunal directions. The NCLAT noted that neither its interim order of March 16, 2023, nor the final judgment of August 28, 2023, had fixed any timeline for payment or mentioned interest on delayed release. The bench said: "When there is no direction for payment of any interest in the orders dated 16.03.2023 and 28.08.2023, nor any period for payment having been fixed, we are not persuaded to accept the submission that JIL was entitled to payment along with accrued interest thereon, till the date when payment was received" The tribunal held that JIL had already received its full entitlement of Rs 542.62 crore and dismissed the plea. Case Title: Jaypee Infratech Ltd. Through its Implementation and Monitoring Committee v Jaiprakash Associates Ltd.Case Number: I.A. No. 3175 of 2025 in Company Appeal (AT) (Insolvency) No. 507 of 2023 For Appellant: Advocates Sumant Batra, Sanjay Bhatt, Sarthak Bhandari, Riya Kaur Arora For Respondent: Senior Advocate Apoorv Kurup with Advocate Piyush Beriwal, Ruchita Srivastava, Nidhi Mittal for JAL; Advocates Vaijayant Paliwal, Nikhil Mathur for other respondents Click here to read/download order

NCLAT Rejects Jaypee Infratech's ₹15 Crore Interest Claim On Funds Deposited By JAL For Homebuyers

Sahyaja MS

Tags