Arrange at least Rs 1,000 crore before next hearing, SC tells Jaypee Associates
The court gave the directions to protect the interest of the home buyers of Jaypee Infratech - it’s wholly owned company - restructuring on the orders of the Allahabad bench of the NCLT.Updated: Nov 06, 2017 23:16 IST
The Supreme Court on Monday asked Jaypee Associates to deposit at least Rs 1,000 crore for protecting the interests of homebuyers of projects in Noida and Greater Noida that the real estate company failed to deliver.
Jaypee pleaded that it be allowed to deposit Rs 400 crore by Friday but the court turned down the request.
A bench headed by Chief Justice Dipak Misra had asked the company on September 11 to deposit Rs 2,000 crore with the registry by October 27. The deadline was later extended to November 5.
Jaypee said on Monday that such a big amount was not possible as the company doesn’t have huge liquid funds.
The bench then suggested an amount of at least Rs 1,000 crore, which Jaypee was told to deposit by November 13.
“Arrange whatever money you can arrange, but it must be a bona fide exercise,” the bench said when Jaypee’s lawyer argued the shareholders’ consent would be needed to sell assets of the group.
“First deposit the amount and then we will discuss. Till then, you can keep arranging money,” the bench said.
The counsel told the court that the company has raised Rs 400 crore in seven days and would raise Rs 300 crore every month to pay off the dues.
The company was earlier allowed to raise Rs 2,000 crore by selling its land and other properties.
But the court had turned down, in a previous hearing, the company’s proposal to hive off the multi-crore Yamuna Expressway to generate money.
Jaypee Associates is facing trial after its subsidiary, Jaypee Infratech Limited, teetered on the brink as IDBI bank moved an insolvency application with the National Company Law Tribunal (NCLT) against the builder for defaulting on loans for its projects.
More than 32,000 homebuyers, who have booked flats but yet to be given possession, approached the top court as insolvency proceedings could deprive them of any refund.
According to India’s insolvency and bankruptcy code, homebuyers are not secured creditors. They can get their money back if something is left after repaying financial institutions such as banks.
The top court stayed on September 4 insolvency proceedings against the real estate firm.
The court also appointed an interim resolution professional (IRP) to work out a plan to protect the interests of homebuyers and creditors.
First Published: Nov 06, 2017 11:47 IST