Homebuyers in SC for stay on liquidation of Jaypee Infratech Ltd
Jaypee homebuyers, who have been stuck with delayed projects for years, have once again approached the Supreme Court seeking a stay on the liquidation of Jaypee Infratech Limited (JIL) after all attempts to work out a resolution plan failed.
In an application filed before the Supreme Court, the homebuyers complained that “if no resolution plan is accepted, JIL will automatically go into liquidation, thereby leaving thousands of homebuyers in the lurch and without any remedy. Liquidation of the company will only be in the interest of the banks who will be able to recover the money lent by them to JIL.”
Admitting the application, a bench led by justice AM Khanwilkar said the application should be served on the advocate appearing before the insolvency board and listed the matter for hearing next week.
The homebuyers claim that once an order for liquidation is passed against JIL, the distribution of proceeds from the sale of assets takes place and secured creditors like banks will be given preference over unsecured creditors, the homebuyers.
“Since no amendment has been brought forth in the definition of a secured creditor, to include homebuyers, they continue to be regarded as unsecured creditors. It is in light of the said provision that this Hon’ble Court had observed in the judgment dated 09.08.2018 that liquidation of JIL is not in the interest of homebuyers, since the same will expose the life savings of more than 20,000 homebuyers, who have admittedly deposited more than Rs 14,000 crore with JIL,” reads the application.
The application also brings out the situation on the ground that despite the best efforts, no resolution is in sight and there is a need for a forensic audit to identify real and fictitious homebuyers.
Making out a case for a forensic audit of JIL, the petitioner says, “The diversion of funds in the present case has been done on an even larger scale than that in projects developed by Amrapali. However, without a forensic audit none of the persons responsible for the said diversion will ever be held accountable. Furthermore, it will be impossible to bring back the hard-earned money of homebuyers without the said diversion being traced to the ultimate beneficiary. A forensic audit is also a necessity to ascertain whether any bookings have been made in the names of fictitious buyers. ”