Rs400 cr too little, deposit at least Rs1,000 cr, SC tells Jaypee Infra

The Supreme Court on Monday rejected a plea by Jaiprakash Associates Ltd (JAL), the parent of Jaypee Infratech, to deposit Rs400 crore with the court registry towards reimbursement of 32,000 homebuyers, ordering it to deposit ''a substantial amount such as Rs1,000 crore'' by 13 November to prove its bona fides.

Rejecting JAL's plea that it be allowed to deposit Rs400 crore first and the rest in parts towards the Rs2,000 crore it was asked by the apex court earlier to pay by 5 November, a bench led by Chief Justice Dipak Misra said, ''It must be a bona fide exercise where a sizeable amount is submitted. First deposit the amount, and then we will discuss any further.''

The real estate firm had rushed to the top court saying no company possessed such a huge amount of ''liquid'' funds (Rs2,000 crore). JAL counsel Anupam Lal Das told the court that the company had raised over Rs400 crore and would raise Rs300 crore every month to pay off the due amount starting January 2018. He said that shareholders' consent would be needed to sell the assets of the group to raise money.

On 25 October, the Supreme Court, rejecting JAL's proposal to hive off its Yamuna Expressway toll asset rights to generate Rs2,000 crore, had given it till 5 November to deposit the money (See: SC refuses permission to Jaypee to hive off Yamuna Expressway; extends time for depositing Rs2,000 cr). The court had on 11 September asked JAL to deposit Rs 2,000 crore with its registry by 27 October to protect the interests of flat buyers.

It had also asked the group to take approval of the insolvency resolution professional (IRP) appointed by the National Company Law Tribunal (NCLT) before selling any property and restrained the directors and managing directors of Jaypee Infratech and JAL from travelling abroad without its prior permission.

The SC had also restored the insolvency resolution proceedings against Jaypee Infratech and directed the IRP to take over its ''records and management'' and submit within 45 days an interim resolution which should safeguard interests of ''low- and middle-income homebuyers'' who have invested in the real estate major's 27 housing projects in the national capital region.

On 4 September, the apex court had stayed an order passed in August by the Allahabad bench of the 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.

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