Banks support JAL’s demand that Yeida restore 1,000 hectare land allotment

Yeida objected to the plan on the grounds that the parent company of the group, JAL, has already mortgaged 80 of the 150 acres to banks

Realty major Jai Prakash Associates Limited (JAL) has obtained the support of banks to its demand that the Yamuna Expressway Industrial Development Authority (Yeida) restore to the firm the allotment of 1,000 hectares of prime land along the Yamuna Expressway.

On June 13, 2023, the high court had rejected the JAL’s proposal to sell 150 acres of this 1,000 hectares and raise ₹1,500 crore to pay the land cost dues owed to Yeida, settling their dues once and for all. (HT Photo)

The Yeida had cancelled the allotment on the grounds that JAL had defaulted on payment of land costs. But the banks have supported the JAL’s request before the Allahabad high court that the two years of Covid-19 (2020-2022) be deemed a “zero period” when penal interest on payments stand waived on account of all-round financial distress, which would bring down JAL’s total dues from ₹3,621 crore to a mere ₹1,483 crore.

On June 13, 2023, the high court had rejected the JAL’s proposal to sell 150 acres of this 1,000 hectares and raise ₹1,500 crore to pay the land cost dues owed to Yeida, settling their dues once and for all.

However, Yeida objected to the plan on the grounds that the parent company of the group, JAL, has already mortgaged 80 of the 150 acres to banks and thus the company cannot sell the same to raise funds.

On Tuesday when the matter was heard by the chief justice Pritinker Diwaker, JAL’s counsel informed the court that the most of the banks have filed their affidavits in support of the writ petition and prayed that Yeida’s cancellation order be set aside.

The counsel also disputed the dues amount of ₹3,621 crore, as stated by Yeida, and called it “a calculation error”.

The counsel told the court that Yeida was seeking interest on the principal amount even for the period post the cancellation order in February 2020, stating that such levy of interest is illegal. The firm claimed that it has to pay only ₹1,483 crore.

But Yeida argued that it has the power to levy additional penal interest in case the petitioner has requested for an extension to pay the dues.

The court subsequently directed JAL to file an affidavit within three days highlighting its reasons for the lower amount.

The Court listed the matter for further hearing to October 16.

It may recalled that it was JAL which built and opened the country’s first Formula One track — the Buddh International Circuit (BIC) — in October 2011. The venue was dropped from the Formula One calendar in 2014 and later redesigned to hold the MotoGP Grand Prix this September.

The company’s infrastructure projects have been mired in controversy with around 6,000 homebuyers and investors struggling to get possession of their units for several years.Jaypee Infratech Limited, the group’s infrastructure company, has been facing corporate insolvency proceedings since 2017.