NCLT approves Suraksha group’s plan to take over Jaypee Infratech
At least 20,000 homebuyers of Jaypee Wish Town projects in Noida and Greater Noida have been waiting nearly a decade to get their homes, for which many of them have paid over 50% of the flat cost
The National Company Law Tribunal (NCLT) on Tuesday approved the resolution plan and bid by Mumbai based Suraksha Realty Limited and Lakshdeep Investments to take over debt-ridden realty company Jaypee Infratech Limited (JIL), thereby reigniting the hopes of thousands of aggrieved homebuyers of getting their dream homes soon.
At least 20,000 homebuyers of Jaypee Wish Town projects in Noida and Greater Noida have been waiting nearly a decade to get their homes, for which many of them have paid over 50% of the total flat cost.
Since 2017, the Supreme Court monitored NCLT has been hearing the corporate insolvency resolution process (CIRP) application of Jaypee Infratech Limited, which failed to deliver its realty projects in Noida, citing financial duress.
According to the Indian Bankruptcy Code provisions, when a company fails to deliver its promises amid a financial crisis, new companies step in to revive the debt-ridden firm. Subsequently, a committee of creditors (CoC) consisting of homebuyers/investors, lenders and other stakeholders, approves a resolution plan through voting to revive the insolvent firm. After CoC approval, it is the NCLT that approves or rejects the plan of the new company.
“In the sequel to the above, we have no other option but to approve the resolution plan submitted by Suraksha Realty Limited along with Lakshdeep Investments and Finance Private Limited along with addendums as duly considered, approved, and recommended by the CoC and placed by the applicant/IRP of JIL before this adjudicating authority. We, therefore, allow the present application and approve the CoC-approved resolution plan placed before us by the applicant/IRP...,” said the order delivered by NCLT president Ramalingam Sudhakar and member, technical, LN Gupta.
In June 2021, the CoC had received the resolution plan from the Suraksha group and the NCLT, on November 22, 2022, reserved its order on a petition filed by the then interim resolution professional of JIL seeking approval for Suraksha’s bid.
Construction work will start at stalled project sites after seven days, as stated in the resolution plan, said the NCLT, adding that a committee comprising representatives of homebuyers, Suraksha and lenders will be formed in the next seven days to monitor and fast-track work at sites, while also submitting monthly progress reports to NCLT.
“The approved resolution plan as annexed with CoC approved addendums shall be binding on all stakeholders of the corporate debtor and become effective from the date of passing of this order, and shall be implemented strictly as per the terms of the plan and implementation schedule given therein,” said the NCLT order.
Apart from that, the NCLT also gave relief to those buyers who sought a refund of their money and quashing of penalties imposed by the JIL in the past.
“...we direct the SRA (Consortium of Suraksha Realty Limited and Lakshdeep Investments and Finance Private Limited) of the corporate debtor Jaypee Infratech Limited (JIL) to look into the prayers made by applicants herein in accordance with law and the provisions made under the resolution plan,” said the order, adding, “We direct the applicants to approach the SRA within a period of three weeks from passing of this order. The SRA shall dispose of the grievance within a period of three weeks thereafter.”
The monitoring committee will work for the initial two or three months until Suraksha takes full control of Jaypee Infratech Limited, the resolution plan said.
Suraksha is set to infuse a capital of ₹3,000 crore to expedite the work at stalled project sites, said the plan approved by the NCLT.
The CoC, consisting of 12 banks, buyers and other stakeholders, had in 2018 rejected the Suraksha group’s bid of ₹7,350 crore to take over JIL. On March 21, 2021, the Supreme Court directed a fresh round of bidding between final bidders, the state-owned NBCC and the Mumbai based Suraksha consortium.
“We were always in favour of Suraksha because we had faith in their resolution plan,” said Ajay Kaul, a Jaypee homebuyer.
An official of Suraksha group, on condition of anonymity, said they will go through the order in detail before making any comment on the development.