SC asks Jaypee to deposit ₹2,000 cr by Oct, seeks plan to protect buyers

The Supreme Court on Monday directed Jaiprakash Associates — the parent company of ailing real estate firm Jaypee Infratech — to pay up ~2,000 crore by October 27, and sought the formulation of a plan to protect affected homebuyers within 45 days.

A bench headed by Chief Justice Dipak Misra also restrained the top officials of the two companies from travelling abroad without its permission. “We are not concerned about the company’s interests. It is our constitutional duty to see that all homebuyers, most of whom belong to lower middle-class families, get their money. The company can drown in the Bay of Bengal (for all we care),” the bench said, before ordering Jaypee Infratech to hand over its management to the National Company Law Tribunal-appointed insolvency resolution professional (IRP).

The bench partially modified a September 4 directive that put on hold the tribunal’s August 8 order appointing the IRP and letting it take over the Jaypee Infratech management.

The tribunal had restrained the realty firm from alienating its properties after IDBI, the lead bank in a consortium of lenders, moved a petition that the company had defaulted on a ~526crore loan. The apex court’s interim order came on pleas filed by homebuyers who felt that the insolvency proceedings would leave them in the lurch, without any hope of recovering their money from the firm.

IDBI had then filed an application seeking an amendment to the order. Both the Centre and the insolvency board supported the bank’s argument that the stay order would go in favour of the company because it had revived Jaypee Infratech’s management.

Attorney general KK Venugopal, who appeared on the Centre’s behalf, admitted that the new insolvency law (under which the proceedings were initiated) had failed to take into account a situation such as this. He also agreed that a representative of homebuyers should be part of the committee meant for framing a resolution policy to restructure the company, and pay the debts of financial or secured creditors.

CONTINUED ON P 6

DIRECTORS AND MD OF JAYPEE INFRATECH AND ITS HOLDING COMPANY, JAYPEE ASSOCIATES, RESTRAINED FROM TRAVELLING ABROAD