SC tells Jaypee to deposit Rs1,000 crore for refund to home buyers
16 May 2018
The Supreme Court on Wednesday directed Jaiprakash Associates Limited to deposit an additional Rs1,000 crore with the court registry by 15 June for refunding home buyers.
The court ruled that on this amount being deposited, the liquidation proceedings against Jaypee Infratech Limited (JIL), a subsidiary of holding company Jaiprakash Associates, will be stayed .
A bench, headed by Chief Justice Dipak Misra and comprising Justices A M Khanwilkar and D Y Chandrachud, warned that in the event of default in depositing this amount by 15 June, the statutory
proceedings against Jaypee Infratech, currently facing insolvency proceedings, will commence.
The court had earlier directed Jaiprakash Associates to deposit Rs2,000 crore, of which only Rs750 crore had been deposited so far.
Jaiprakash Associates pleaded that its proposed revival plan for Jaypee Infratech should be considered afresh by the Committee of Creditors (COC), as liquidation of Jaypee Infratech was neither in the interest of creditors, nor in the interest of home buyers.
It proposed offering 2,000 equity shares of Jaypee Infratech to each home buyer as part of its Rs1,000-crore proposal to revive it, he added.
It had sought a direction for restraining the National Company Law Tribunal (NLCT) at Allahabad from proceeding further with the insolvency proceedings.
It had also said that the handing over of the company to the "sole resolution applicant" would result in compromising the interests of home buyers, minority shareholders, employees and even the financial creditors of the company.
The realty firm had said it was completing 500 dwelling units for delivery to the home buyers every month and urged that its representation be considered by the Insolvency Resolution Professional (IRP) as per law.