27 August 2019: Homebuyers of embattled Jaypee Infratech (JIL) on Monday moved the Supreme Court, challenging the July order of the NCLAT that allowed fresh bidding for the debt-laden real estate firm and also barred promoters from participating in the fresh auction.
A bench led by Justice AM Khanwilkar tagged the matter along with similar other appeals pending before it. The batch of cases is likely to come up for hearing on August 29.
Jaiprakash Associates (JAL), the parent company of JIL, and Manoj Gaur, the CMD of the suspended management of JIL, had also challenged the NCLAT’s order that allowed fresh bidding for the embattled firm and also barred promoters from participating in the fresh auction.
Earlier on August 2, the SC had in effect restrained the CoC of JIL from inviting fresh bids for two weeks and had asked parties to maintain status quo after the government counsel apprised the Bench that the proposed amendments to the Code were being notified soon.
Wish Town Home Buyers Welfare Society, which claims to have over 1,100 homebuyers of various JIL projects, in its appeal, stated that the appellate tribunal without even considering all the proposals and comparing the best proposal in the interest of homebuyers had “erroneously” extended the Corporate Insolvency Resolution Period (CIRP) of JIL for another 90 days so as to invite fresh bids for the debt-laden firm. This order, according to the association, amounted to “usurping the powers of the NCLT, CoC and RP, especially when the statutory period for completion of CIRP as stipulated under IBC had expired” in May.
It suggested that the apex court should “do complete justice” by inviting the bids in the court itself so as to get rid of the complex and cumbersome process of rounds and rounds of litigations and proceedings before CoC, NCLT, and NCLAT.
The homebuyers body said that JAL had submitted its proposal to CoC under Section 12A of the IBC for consideration and withdrawal of CIRP. It said that though the proposal given by JAL was completely in favour of all the financial creditors which included homebuyers, it was not considered. JAL had stated that JIL had more assets then liabilities and the interest of homebuyers would be fully protected and the parent company would complete around 19,000 flats within four years and give possession of flats to all the homebuyers, the association said in its appeal .
“The darker clouds continue to cast gloom over the homebuyers and their frustration knows no bounds as even after 7 years of delay, the apartments – which were booked by them in 2009 – are nowhere near completion,” the petition said.