The Supreme Court on Monday expressed displeasure at the failure of Jaiprakash Associates Ltd. (JAL), a unit of real estate giant Jaypee group, in failing to comply with its order dated October 25 to deposit Rs 2,000 crores with the court’s registry by November 5.
The advocate appearing on behalf of JAL submitted before the apex court, “We are ready and willing to deposit an amount of Rs. 693 crores today itself. We have Rs. 100 crores by way of cheque in a sealed envelope to be placed at the disposal of the court. Besides, there are Rs. 593 crores lying in our account held with ICICI Bank.”
To a request by JAL to direct the bank to release the said amount in their favour, the counsel for ICICI bank responded, “The said amount is not available for release to the developer at it is intended exclusively for the protection of the interest of the creditors. With the process of debt reconstruction of the company underway, it would not be feasible to release the amount.”
Jaypee Infratech Ltd. (JIL), having defaulted in the repayment of a loan amount of Rs. 526.11 crores, had been dragged to the National Company Law Tribunal (NCLT), Allahabad, by a consortium of banks led by IDBI Bank seeking redressal under the Insolvency and Bankruptcy Code of 2016. Flat buyers in Jaypee’s housing project ‘Wish Town’ in sector 129, Noida, had approached the top court against the insolvency proceedings so initiated. The Supreme Court had, on September 11, directed the NCLT appointed Investor Resolution Professional to overtake the management of JIL and to prepare the Insolvency Resolution Plan “making all necessary provisions to protect the interests of the home buyers.
In addition, the Committee of Creditors operating under section 21 of the Code of 2016 had been directed to “espouse the cause of the home buyers and protect their interests”. Further, JAL, which is not a party to the insolvency proceedings, had been ordered to deposit Rs 2,000 crores with the Supreme Court by October 27. Thereafter, on October 25, a plea was advanced before the apex court that JIL be permitted to transfer its rights under the Concession Agreement in respect of Yamuna Expressway with a view to comply with the order of the deposit of money. The advocates representing the Interim Resolution Professional (IRP) had countered this request on the ground that the rights under the Concession Agreement in respect of Yamuna Expressway belong to Jaypee Infratech, which is subject to the proceedings under the Insolvency & Bankruptcy Code and, therefore, they cannot be transferred. Accordingly, the court had refused to interfere with its order of September 11, but extended the time period for making the deposit of Rs. 2,000 crores by JAL to November 5.
It was further contended on behalf of the Jaypee group, “JIL is not going into liquidation. We already have 18 investors willing to pump in money to complete the Noida project”.
In response to an invitation for Expressions of Interest (EoI) issued by the IRP to prepare an Insolvency Resolution Plan in pursuance of the provisions of the Code of 2016, as many as 18 companies, including Vedanta Group, Lodha Group, Deutsche Bank, Larsen and Toubro and Tata Realty have come forward with the desire to acquire shares in Jaypee Infratech and complete the project undertaken thereby. On Friday, November 10, the Committee of Creditors held a meeting to discuss the EoIs as submitted by the potential bidders.
A bench of Chief Justice Dipak Misra, Justice DY Chandrachud and Justice AM Khanwilkar on Monday appointed advocate Pawan Shree Aggarwal as the amicus curiae, directing the setting up of an online platform wherein flat buyers could register grievances pertaining to Jaypee’s Wish Town project. Further, the apex court also required all directors of the company, except institutional directors, to submit an affidavit making disclosure of their personal assets by November 22 and appear in person before the court at the next hearing scheduled on the said date.