As the insolvency resolution process for debt-ridden real estate giant Jaypee Infratech Ltd comes to a dead end & the company is staring at liquidation for not completing the process within the statutory time period of 270 days, the Supreme Court on Tuesday agreed to hear plea of homebuyers seeking its intervention to protect their interests & stop the liquidation process.
The apex court had in August last year ordered commencement of insolvency proceedings afresh against Jaypee Infratech Ltd before the National Company Law Tribunal, Allahabad & asked the interim resolution professional(IRP) to seek fresh bids from other companies to take over the realtor. Under the Insolvency & Bankruptcy Act, the corporate insolvency resolution process must be completed within 270 days & if the process fails, the course of liquidation starts. As the time period of 270 days expired on May 6, the homebuyers rushed to the Supreme Court to stay the liquidation process.
Appearing before a bench of Justices A M Khanwilkar & Dinesh Maheshwari, senior advocate Ajit Sinha submitted that the court should direct IRP to file a status report. He said more than 32,000 homebuyers had invested in different housing projects of Jaypee & the court should intervene to protect their interests.
Agreeing to hear the plea, the bench asked Sinha to provide the copy of the petitions to other parties including Jaypee & IRP & posted the case for next week.
“If no resolution plan is accepted within statutory period, JIL will automatically go into liquidation, thereby leaving thousands of homebuyers in the lurch & without any remedy. Liquidation of the company will only be in the interest of the banks which will be able to recover the money lent by them to the debtor,” the petition said.
It said that liquidation of the company would defeat the purpose of safeguarding the interest of homebuyers who had paid around Rs 14,000 to JIL. “The provisions clearly stipulates that in case of distribution of the proceeds, the secured creditors will be given preference over an unsecured creditor. However since no amendments has been brought forth in the definition of secured creditors to include the homebuyers, they continued to be regarded as unsecured creditors,” it said.
