New Delhi: The Supreme Court on Wednesday directed Jaiprakash Associates Ltd (JAL) to deposit Rs1,000 crore with its registry by 15 June to avert the liquidation of its subsidiary Jaypee Infratech Ltd.
In case of failure to deposit the amount, statutory proceedings against Jaypee Infratech would proceed as per law, a three-judge bench headed by Chief Justice Dipak Misra added.
Under the Insolvency and Bankruptcy Code, the bankruptcy court can order the liquidation of a company if no resolution plan is finalized within 270 days of referring it for insolvency proceedings. For Jaypee Infratech, the deadline was 12 May.
The company owes over Rs13,500 crore to its lenders.
The court also asked amicus curiae Pawan Shree Agrawal to work out a scheme to repay money to homebuyers seeking refunds.
Arguing that the embargo under Section 29A was no longer applicable due to the unsuccessful completion of the insolvency proceedings against Jaypee Infratech, Jaiprakash Associates offered to pay all dues of lenders and satisfy the grievances of homebuyers.
Jaypee Infratech is among the 12 companies against whom the RBI, through its 13 June directive, asked banks to file insolvency petitions. The National Company Law Tribunal’s Allahabad bench admitted a plea moved by IDBI Bank seeking the initiation of a corporate insolvency resolution process against the real estate firm in August 2017.
However, on 4 September, the apex court stayed insolvency proceedings against Jaypee, following a batch of petitions moved by various associations of homebuyers fearing they will lose their apartments and not get any compensation.
This stay was later revoked by the apex court and it directed the resolution professional to take over the management of the company and submit an interim resolution plan that takes into account the interest of homebuyers.
The court had also directed Jaiprakash Associates, Jaypee Infratech’s holding company, to deposit Rs2,000 crore to protect the interest of homebuyers. Out of this, only Rs750 crore have been deposited so far.
The matter would be heard next in the first week of July.