SC tells Jaypee to deposit Rs1,000 crore to avert liquidation of subsidiary
The Supreme Court asks Jaiprakash Associates to deposit an additional Rs1,000 crore by 15 June for ensuring refund of money to the hassled home buyers
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Arguing that the embargo under Section 29A was no longer applicable due to the unsuccessful completion of the insolvency proceedings against Jaypee Infratech, Jaiprakash Associates offered to pay all dues of lenders and satisfy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.
- Porsche IPO could value carmaker as high as $81 billion, CFO says
- Netflix earnings will test waters for tech giants after sell-off
- SoftBank’s Masayoshi Son, Saudi’s prince and a $22 billion test
- Sajjan Jindal keen to buy out stressed hydroelectric plants
- Beat the queue at airports, railway stations by being honest in paying income tax
- Banks turned wary of NBFCs months before IL&FS defaults
- HUL Q2: Rising input costs face off against healthy demand growth
- Q2 results: DMart finally set to face a reality check
- Temporary staffing: Decent employee additions, margin pressures may sustain
- Gujarat relief for Tata Power, Adani Power underlines sector’s harsh reality