The counsel for Jaiprakash Associates told the Supreme Court that the company had raised Rs409 crore in seven days and would raise Rs300 crore every month to pay off the total amount due. Photo: Mint
The counsel for Jaiprakash Associates told the Supreme Court that the company had raised Rs409 crore in seven days and would raise Rs300 crore every month to pay off the total amount due. Photo: Mint

SC rejects Jaiprakash Associates plea to deposit Rs400 crore for homebuyers

Supreme Court had directed Jaiprakash Associates to furnish Rs2,000 crore to safeguard the interest of homebuyers, and the company is seeking to deposit the money in parts

New Delhi: The Supreme Court on Monday rejected a plea by Jaiprakash Associates Ltd (parent company of Jaypee Infratech) to deposit Rs400 crore with the court registry to safeguard the interest of homebuyers.

The company was seeking to deposit the money in parts towards the Rs2,000 crore that it had been directed to pay by 27 October which was later extended to 5 November.

Jaiprakash Associates was directed to furnish Rs2,000 crore to safeguard the interest of homebuyers. Any property to be sold by them would have to be approved by the court.

“It must be a bonafide exercise where a sizeable amount is submitted. First deposit the amount, and then we will discuss any further. Till then, you can keep arranging money," said chief justice Dipak Misra.

The counsel for Jaiprakash Associates told the court that the company had raised Rs409 crore in seven days and would raise Rs300 crore every month to pay off the total amount due.

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 approached the court seeking restoration of 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 Jaypee Infratech project.

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.

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. Jaypee Infratech is a subsidiary of Jaiprakash Associates.

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 such an order was forcing homebuyers to submit themselves to the jurisdiction of the IBC, even though it does not cater to their interests.

Jaypee Infratech was among the 12 companies, against whom the Reserve Bank of India (RBI), through its 13 June directive, had asked banks to file insolvency petitions.

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