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Insolvency plea: What Jaypee homebuyers need to do before filing claims

On August 9, the Allahabad bench of National Company Law Tribunal (NCLT) admitted an insolvency plea of IDBI Bank relating to default of Rs526.11 crore loan by Jaypee Infratech in its Wishtown project in Noida. The NCLT has asked the homebuyers to file their claims by August 24.

noida Updated: Aug 16, 2017 10:10 IST
Vinod Rajput
Vinod Rajput
Hindustan Times
Jaypee insolvency,Jaypee builder,Jaypee infratech
On August 9, the Allahabad bench of National Company Law Tribunal (NCLT) admitted an insolvency plea of IDBI Bank relating to default of Rs 526.11 crore loan by Jaypee Infratech in its Wishtown project in Noida.(Sunil Ghosh/HT Photo)

On August 9, the Allahabad bench of National Company Law Tribunal (NCLT) admitted a plea from private bank IDBI to begin insolvency proceedings against Jaypee Infratech for defaulting on Rs 526.11 crore loan the real estate developer for its Wishtown project in Noida.

NCLT has appointed Anuj Jain as the Interim Resolution Professional (IRP) to carry out the proceedings under the Insolvency and Bankruptcy Code. Jain has been given six months to revive the company by paying back debts to financial creditors and homes to buyers. The period can be extended by three more months. If Jain is unable to revive the projects, assets of Jaypee Infratech will be sold and recovered money will be distributed among creditors including homebuyers.

The NCLT has asked the homebuyers to file their claims by August 24.

An IRP, appointed by NCLT for another project, tells Jaypee Infratech homebuyers the steps they need to take before August 24.

Q: Who should file a refund?

A: Two companies of Jaypee group – Jaypee Infratech and Jaypee Associates — are developing projects in Wishtown Integrated township in Noida. Homebuyers who have purchased flats through Jaypee Infratech need to approach the Interim Resolution Professional for refund of their money incase revival of the company fails.

Q: What should you do before August 24?

A: A Jaypee Infratech homebuyer should file a claim detailing investment along with valid documents to the IRP, Anuj Jain. A buyer comes under category of a financial creditor, hence they need to file form-C. The form can be downloaded from the website http://www.ibbi.gov.in/limited-insolvency.html.

Q: Where does a homebuyer stand when IRP distributes funds?

A: Banks and financial lenders get the highest priority, after which the buyers who have filed claims with IRP get refunded. Those who fail to file claims will get refunds only in the end depending on the availability of funds.

Q: Can a relative file for a refund on behalf of a homebuyer?

A: If buyers are unable to file claims themselves, their family member can along with all documents related to the flat purchase including paid receipts.

Insolvency leaves buyers in the lurch
Jaypee Infratech executed the Yamuna Expressway project under the PPP model. The agency was given land development rights of 25 million square metres, approximately, alongside the expressway

Q: Should you hire a lawyer?

A: Filing claims in a group or through buyers’ associations through an expert lawyer is a preferred option, but any buyer can file a claim individually.

Q: What are the required documents?

A: Along with Form C, a buyer needs to purchase a Rs10 stamp paper and file an affidavit detailing the flat number along with proofs of payments made to Jaypee Infratech.

Q: What are the options for homebuyers if claim is not filed before August 24?

A: An IRP can accept claims even after the stipulated date, but it is advisable to file claims by August 24. Those who fail to stake a claim for a refund will be last in priority when funds are distributed.

First Published: Aug 15, 2017 23:47 IST