NCLT to hear insolvency proceedings against Jaypee

NCLT to hear insolvency proceedings against Jaypee

Homebuyers had moved the apex court stating that around 32,000 people had booked flats and were now paying instalments. Photo: Mint

Homebuyers had moved the apex court stating that around 32,000 people had booked flats and were now paying instalments. Photo: Mint

New Delhi: In a setback to the Jaypee group, the Supreme Court on Thursday asked the National Company Law Tribunal (NCLT), Allahabad, to deal with insolvency proceedings against Jaypee Infratech Ltd (JIL), and barred the group and its promoters from participating in fresh bidding process.

A bench headed by Chief Justice Dipak Misra said the limitation period of 180 days to conclude the insolvency proceedings will commence from Thursday. The Bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said the Rs 750 crore deposited by JIL in the apex court will be transferred to NCLT Allahabad.

The top court also allowed the Reserve Bank of India (RBI) to direct banks to initiate separate insolvency proceedings against JIL’s holding company Jaiprakash Associate Ltd (JAL). The Bench said homebuyers should be included in the Committee of Creditors in accordance with the amendments made in the Insolvency and Bankruptcy Code (IBC). The Bench disposed of all petitions and applications pending before it.

The apex court had earlier reserved its order on “interim reliefs” sought by various stakeholders, including the homebuyers of JIL, JAL, banks and financial institutions and the resolution professional. IDBI Bank had moved the application before the NCLT against debt-ridden JIL, after it allegedly defaulted on a Rs 526 crore loan. Lawyers, representing homebuyers, opposed the submission that JAL be allowed to complete housing projects, saying that it was barred under the law to do so. Taking note of the enormity of the situation, the bench said it was thought that the liability of the firm was to the tune Rs 2,000 crore, which went beyond Rs 30,000 crore.

Earlier, JAL had said it would deposit Rs 600 crore more to refund homebuyers if it was allowed to dispose of its identified assets, including a cement plant at Rewa in Madhya Pradesh. JAL had said Rs 750 crore was deposited with the apex court’s registry and Rs 600 crore more would be required for paying the principal sum to homebuyers.

Homebuyers had moved the apex court stating that around 32,000 people had booked flats and were now paying instalments.

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