Supreme Court to hear bank plea against stay on Jaypee’s insolvency

NCLT had on August 9 issued a moratorium order, restraining the Jaypee Infratech management from functioning and appointed the IRP after IDBI moved an application when the company defaulted in loan repayment.

IDBI Bank moved the Supreme Court on Tuesday against its day-old order that put on hold National Company Law Tribunal’s (NCLT) directive to initiate insolvency proceedings against Jaypee Infratech on the bank’s plea.

Noida, India - Aug. 23, 2017: Jaypee wish Town at sector 128, in Noida, India, on Wednesday, August 23, 2017. (Photo by Virendra Singh Gosain/ Hindustan Times) to go with Vinod Rajput’s story. (Virendra Singh Gosain/HT PHOTO)

IDBI Bank counsel, senior advocate Abhishek Manu Singhvi, told a bench headed by Chief Justice Dipak Misra that the top court’s order had “unintentionally” benefitted the embattled company. The bench posted the bank’s plea for hearing on September 11.

“Your (lordships) order reversed the position and, as a consequence, the company has gone back to the defaulting promoters,” Singhvi submitted before the bench.

The bank’s money was also public money and “we are seeking modification of that order,” he said.

The senior lawyer said the IDBI would like that the insolvency resolution process should settle the claims of home buyers along with the banking institutions.

Senior advocate Ajit Sinha, appearing for one of the home buyers, vehemently opposed the contention of the bank and said the home buyers were happy because of the apex court order which need not be changed.

According to the flat buyers they do not fall in the category of secured creditors like banks and hence can get back their money only if something is left after repaying the secured and operational creditors, a plea read.

The buyers had contended that around Rs 25,000 crore worth of money of flat buyers and others had been at stake and the insolvency proceedings were initiated “for a petty sum of Rs 500 crore”.

Around 32,000 persons had booked flats in Jaypee Infratech projects.

NCLT had on August 9 issued a moratorium order, restraining the Jaypee Infratech management from functioning and appointed the IRP after IDBI moved an application when the company defaulted in loan repayment.