9 July 2019: The Supreme Court on Tuesday asked the Centre to come out with a “uniform” proposal for all cases to resolve the difficulties being faced by lakhs of homebuyers who have not yet got possession of flats despite paying huge amounts of money to real estate builders. The apex court, which was hearing a homebuyers matter related to Jaypee Infratech Ltd, said the issue concerns lakhs of flat buyers and the Centre should give a proposal to resolve it.
“We want suggestions from the Union of India which could be uniform for all such cases,” a bench comprising justices A M Khanwilkar and Dinesh Maheshwari said. “This issue will be bothering lakhs of homebuyers. Within the IBC (Insolvency and Bankruptcy Code), we cannot do anything. But outside it, you (Centre) can suggest something. We can consider that,” the bench told Additional Solicitor General (ASG+) Madhavi Divan, who was appearing for the Centre.
The bench made the observation while hearing a plea which has sought that Jaypee Infratech Ltd (JIL) be not sent into liquidation, although the deadline for the corporate inlpsolvency resolution process is over, as it would cause “irreparable loss” to thousands of home buyers. The ASG told the court that proper authority to respond to the plea would be the resolution professional or the bank concerned.
“Can some other arrangement be suggested by the Union of India without disturbing the ongoing process?,” the bench asked, adding, “We are keen to know whether you have something to suggest”. “Policy issue has to be resolved by the Union of India,” the bench said and posted the matter for hearing on July 11.
The apex court had on August 9 last year ordered re-commencement of the resolution process against JIL and barred the firm, its holding company and promoters from participating in the fresh bidding process. It had also allowed the Reserve Bank of India to direct banks to initiate corporate insolvency resolution proceedings (CIRP) against Jaiprakash Associates Ltd (JAL), the holding company of JIL, under the IBC.
It had said there was “no manner of doubt” that JAL and JIL lacked financial capacity and resources to complete unfinished housing projects in which over 21,000 home buyers had not been given the possession of their flats till then.
The fresh plea filed in the top court has sought a direction that an “independent and thorough forensic audit” of JIL should be conducted from the date of its incorporation.
Referring to the apex court’s last year order, the plea has said, “The court had made a conscious effort to avoid liquidation of Jaypee Infratech Limited. However, the events as have unfolded subsequent to the passing of the judgment have frustrated the efforts as made by the court.” As per apex court’s direction, the 270 days for completion of CIRP have concluded on May 6, it has said.
“Till date only two serious bids have been received by the Committee of Creditors. One bid has been submitted by National Buildings Construction Corporation Limited, whereas the other has been submitted by Suraksha ARC. None of the said bids have been accepted by the Committee of Creditors till date,” the plea has said, claiming that “threat” of JIL going into liquidation is “turning into a reality with each passing day”.
It said if no resolution plan is accepted till May 6, JIL would “automatically go into liquidation”, leaving thousands of home buyers without any remedy. Seeking forensic audit of JIL, the plea alleged that “diversion of funds in the present case is on an even larger scale than that of projects developed by Amrapali Group of Companies”.