IDBI Bank moves SC to restore insolvency case against Jaypee Infratech
New Delhi: IDBI Bank moved the Supreme Court on Tuesday seeking restoration of insolvency proceedings against Jaypee Infratech Ltd.
“By staying the insolvency process the court gave the company back to its promoters,” the bank told the court.
This comes a day after the apex court stayed an order passed in August by the Allahabad bench of the National Company Law Tribunal (NCLT), which initiated insolvency proceedings against Jaypee Infratech.
The court was hearing a public interest litigation (PIL) by Delhi resident Chitra Sharma, who has booked a home in a project by Jaypee Infratech. Homebuyers in Jaypee Infratech projects were required to fill up forms to register claims in the corporate insolvency resolution process against the firm by 31 August.
“A total of 32,000 people are being affected and have been left remedy-less,” Aishwarya Sinha, lawyer for Sharma, said.
In a 9 August order passed by the Allahabad bench of NCLT, liquidation proceedings against Jaypee Infratech were initiated under the Insolvency and Bankruptcy Code of India (IBC), 2016. Jaypee Infratech has defaulted on Rs526.11 crore of loans outstanding to IDBI Bank Ltd. Jaypee Infratech is a subsidiary of Jaiprakash Associates Ltd.
Sharma’s plea sought a stay on the NCLT order, and urged the court to conduct a forensic audit of Jaypee Infra and Jaiprakash Associates.
As per the NCLT order, it is mandatory for homebuyers to submit forms B and C issued by the insolvency resolution professional (IRP) that pertain to financial creditors. However, on 16 August, IBC was amended to include homebuyers as another category of individual creditors.
The petition submitted that such an order was forcing homebuyers to submit themselves to the jurisdiction of the IBC, even though it does not cater to their interests.
The matter will be heard next on 11 September.