RBI seeks SC permission to start insolvency proceedings against Jaiprakash Associates
New Delhi: The Reserve Bank of India (RBI) moved the Supreme Court on Monday, seeking permission to initiate insolvency proceedings against Jaiprakash Associates Ltd.
Jaiprakash Associates, parent company of Jaypee Infratech Ltd, is among the 12 companies against which the RBI, through a 13 June directive, asked banks to file insolvency petitions.
The RBI application was mentioned before a bench headed by chief justice Dipak Misra, who said that it will be taken up for hearing on 10 January.
On 22 November, the court restrained independent directors and promoters of Jaiprakash Associates Ltd and their family members from transferring any personal assets or property without the court’s permission in order to safeguard the homebuyers’ interests.
They will be held for criminal prosecution or contempt of the courts order if found in violation of the order, the court held.
The court was hearing an application filed in a public interest litigation (PIL) by Delhi resident Chitra Sharma, who has booked a home in a Jaypee Infratech project.
On 4 September, the apex court had stayed an order passed in August by the Allahabad bench of the National Company Law Tribunal (NCLT), which initiated insolvency proceedings against Jaypee Infratech. A day later, IDBI Bank Ltd approached the court seeking restoration of insolvency proceedings against Jaypee Infratech.
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.
Sharma’s plea sought a stay on the NCLT order, and urged the court to conduct a forensic audit of Jaypee Infratech and Jaiprakash Associates. The petition submitted that the 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 10 January.