SC asks non-institutional directors of Jaiprakash Associate to appear before it
A bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud asked the directors to appear on November 22.india Updated: Nov 13, 2017 22:24 IST
The Supreme Court on Monday came down heavily on Jaiprakash Associates Limited (JAL) for missing the deadline to deposit Rs 2,000 crore for refunding money to homebuyers.
JAL is the parent company of Jaypee Infratech, which is facing insolvency proceedings for failing to pay back debt of financial creditors.
Irked with the company for not following the court order on making the payment, Chief Justice Dipak Misra’s bench directed JAL’s non-institutional directors to appear in court in person on November 22 and sought details of their personal assets.
The court asked advocate Pawan Sree Agrawal to assist it in the case and develop a web portal for homebuyers. The website will register the claims of all the flat buyers so that a consolidated figure of the amount Jaypee Infratech owes to them can be placed before the SC.
JAL was directed on September 11 to deposit the amount with the court registry to protect the interests of homebuyers. On November 6, the company was refused permission to deposit Rs 400 crore. Its proposal to hive off the Noida expressway to raise the money was also rejected.
During the brief hearing on Monday, JAL informed the court it had Rs 593 crore with ICICI Bank and was ready with a cheque of Rs 100 crore in a sealed envelope for depositing it with SC.
The company submitted it will require an order from the SC, asking the bank to release the amount it holds, a plea ICICI bank’s lawyer opposed. The counsel said Rs 593 crore lying with the bank was meant for the benefit of the lenders of JAL. Also, it said the process of debt reconstruction of the company was going on and it would not be feasible to release the amount.
The SC has already restrained the managing director and the directors of Jaypee Infratech Ltd from travelling abroad without the court’s permission. It is hearing homebuyers’ petitions against the insolvency proceedings initiated against the real estate company.
Although the court had stayed the insolvency proceedings, it had asked the company to hand over the records to the Insolvency Resolution Professional (IRP) appointed by the National Company Law Tribunal (NCLT).
The IRP was also asked to prepare a plan indicating steps he intends to take to protect over 32,000 homebuyers. To take care of their interest, the top court has also asked senior advocate Shekhar Naphade to participate in the meeting of creditors to represent their case.
Jaypee Associates was allowed to raise Rs 2,000 crore by selling land or properties. But for the same the company requires to take SC’s nod.
Flay buyers had rushed to the top court after the NCLT accepted IDBI bank’s petition to start insolvency proceedings against Jaypee Infratech. They said under the Insolvency and Bankruptcy Code of 2016, home buyers did not fall in the category of secured creditors such as banks and would be last in the queue to get their money back from the debt-laden realty firm.