New Delhi: A Supreme Court bench headed by Chief Justice Dipak Misra on Thursday reserved its verdict on the course of action in the Jaypee Infratech Ltd (JIL)- homebuyers litigation, after the corporate insolvency resolution period for JIL expired in May this year.
The order was reserved by the bench after hearing all stakeholders, including the parent company, Jaiprakash Associates Limited (JAL), the resolution professional for JIL, homebuyers and the lender banks.
While Insolvency and Bankruptcy Board of India has suggested re-constitution of a committee of creditors which would include the homebuyers, the insolvency resolution professional suggested the constitution of an independent committee under a retired Supreme Court judge to assess the financial capability of JIL, JAL or any other company that was interested in completing the housing projects.
JAL argued that its master restructuring Agreement (MRA), which is pending before the National Company Law Tribunal (NCLT) for its approval, should be allowed to come into effect so that it could revive its subsidiary and honour debts owed to the homebuyers.
JAL claims that the MRA has been approved by more than 30 lender banks.
IDBI Bank’s insolvency plea against JIL was admitted in August 2017 by the NCLT.
However, on 4 September last year, the apex court stayed the insolvency proceedings initiated against Jaypee, after various associations of homebuyers moved a batch of petitions fearing they will lose their apartments and not get any compensation.
The stay was later revoked by the court, which directed the resolution professional to submit an interim resolution plan that takes into account the interest of homebuyers.
The court also directed the parent company, JAL, to deposit ₹ 2,000 crore to protect the interest of homebuyers. Out of this, only ₹ 750 crore has been deposited so far.
JIL features in the Reserve Bank of India’s first list of non-performing assets accounts and had debt exposure of over ₹ 9,783 crore as of September 2017. IDBI Bank’s insolvency plea against JIL was admitted by NCLT in August 2017.
The parent company, JAL owes more than ₹ 29,000 crore to various banks.