Business News
SC freezes properties of 13 Jaiprakash Associate directors, promoters; firm deposits Rs 275 crore with apex court
Trouble seems to be brewing for debt-ridden Jaiprakash Associate Limited (JAL) as the Supreme Court on Wednesday ordered the company to payback all dues to homebuyers and warned its directors and promoters from alienating their properties as well as the assets of their family members. The real estate firm, however, deposited a demand draft of Rs 275 crore with the Supreme Court bench.
Several hundred people have been left in the lurch after the National Company Law Tribunal (NCLT), on August 10, admitted the IDBI Bank’s plea to initiate insolvency proceedings against the company for defaulting on a Rs 526-crore loan. The bench asked the company’s 13 directors, including five promoters of embattled JAL, not to alienate their personal properties and asked the firm to deposit Rs 150 crore and Rs 125 crore by December 14 and December 31, respectively.
A bench comprising Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud further restrained the directors from alienating the properties of their immediate family members also and cautioned that any violation of its directive would hold them liable for criminal prosecution. Meanwhile, the bench-appointed lawyer Pawan Shree Agrawal as amicus curiae and asked him to set up within a week, a web portal, which would contain all details, including grievances of the hassled homebuyers.
Senior advocates Mukul Rohatgi and Ranjit Kumar, who appeared on behalf of the directors, including independent and promoters, said they have filed affidavits in pursuance of earlier direction asking them to give details of their personal properties. Senior advocate Kapil Sibal, appearing for the real estate company, said adequate time should be given to the firm for arranging money or otherwise it may go the Sahara way. The bench has now posted the plea of homebuyers for further hearing on January 10 and directed all the directors to appear again before it on that date.
Homebuyers, including one Chitra Sharma, had moved the apex court saying that around 32,000 people had booked their flats and are now paying installments. The top court had on September 4 stayed insolvency proceedings against the real estate firm at National Company Law Tribunal (NCLT). Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence they can get back their money only if something is left after repaying the secured and operational creditors, Sharma, in her plea, said.
The company is facing insolvency proceedings for not being able to payback more than Rs 2,000 crore to homebuyers. On November 9, the apex court had refused to give Jaiprakash Associates more time to deposit Rs 2,000 crore in parts, saying the group must submit a sizable amount, such as Rs 1,000 crore, to show their bonafide before asking for an extension. The company is developing more than 30,000 flats in Noida, most of which are incomplete. Homebuyers have been protesting against inordinate delays in completion of the projects. The Supreme Court had on Wednesday rejected the Jaypee group’s plea to let it hive off the rights of multi-crore sixlane Yamuna Expressway connecting Greater Noida with Agra in order to raise funds to repay the homebuyers.
The group had approached the court seeking permission to hive off the rights of the expressway and recall the September 11 order in which the court had asked it to deposit Rs 2,000 crore to refund home buyers. However, IDBI Bank had opposed the plea on the ground that the Yamuna Expressway did not belong to the Jaypee Group and the concession agreement with the government was not transferable. The counsel for Yamuna Expressway Industrial Development Authority had also informed the court that the rights under the concession agreement for the expressway project were non-transferable.
