12 July 2019: The Supreme Court said that it would intervene to protect Jaypee homebuyers if the resolution plan under the insolvency proceedings failed on Thursday. It is likely to step in order to stop liquidation of the company to safeguard the investment of the buyers. It asked all the parties to work together including NBCC and creditor banks, to sort out differences over the plan.
After failing to come up with a policy to protect buyers’ interest, the Centre urged a bench headed by Justice A M Khanwikar to adjourn the hearing as the case was listed before the National Company Law Appellate Tribunal (NCLAT) on July 17 for a final decision on the resolution plan. It posted hearing for July 18. The court said in an attempt to take over Jaypee Infratech Ltd which is facing insolvency proceedings, the parties should explore all possibilities to pave the way for other builders.
The bench has assured the homebuyers that their interest would be protected, they have urged the bench to pass an interim order to stop liquidation of the company, according to a newspaper report. “We should wait for the outcome of the tribunal proceedings. We also want the government to explore all possibilities. If the proposal (resolution plan) given to the tribunal is acceptable to all, then the problem will be solved,” the bench said.
It may be noted that in 2017, Jaypee Infratech went into insolvency after the National Company Law Tribunal (NCLT) admitted an application by an IDBI Bank-led consortium seeking action under the Insolvency and Bankruptcy Code (IBC).
After the creditors rejected NBCC’s bid to acquire Jaypee Infratech, the NCLAT had directed representatives of banks, allottees and other stakeholders to appear before it on July 17 to consider how the bid could be tweaked for the homebuyers’ benefit.
The bid to acquire the insolvent Jaypee Infratech Ltd (JIL) was put to vote from May 31, 2019 to June 10, 2019 and a majority of the lenders, led by IDBI Bank, voted against the bid on the grounds that it was conditional. However, home buyers were in favour of the bid.
It may be noted that the NBCC’s bid seeks the cancellation of an estimated income tax liability of Rs 33,000 crore due over a period of 30 years under the concession agreement for the transfer of land from the Yamuna Expressway Industrial Development Authority to JIL.
On June 20, in the committee of creditors’ (CoC) meeting, the offer was discussed and it was decided that resolution professional (RP) Anuj Jain would inquire from AIDPL about the completion timeline.