SC Rejects Jaypee's Plea To Deposit Rs 400 Cr
The Supreme Court (SC), on November 6, refused to allow Jaypee Associates to deposit Rs 400 crore with its registry as against Rs 2,000 crore directed by it, and asked the developer to submit a substantial amount to prove its bonafide.
The developers, which was asked on September 11 to deposit Rs 2,000 crore with the apex court registry by October 27, rushed to the SC, saying no company possessed such a huge amount of "liquid" fund and urged that it should be allowed to deposit Rs 400 crore by November 10.
A Bench headed by Chief Justice Dipak Misra said Rs 400 crore was a paltry sum and the developer will have to deposit substantial amount to establish its bonafide.
"Arrange whatever money you can arrange, but it must be a bonafide exercise," the Bench, which also comprised Justices A M Khanwilkar and D Y Chandrachud, said when the counsel for the developer said the shareholders' consent would be needed to sell the assets of the group.
The Bench then said that the developer may consider depositing at least Rs 1,000 crore by November 13 with its registry.
The Court had on September 11 directed Jaypee Associates to deposit Rs 2,000 crore by October 27 and asked the National Company Law Tribunal (NCLT)-appointed interim resolution professional (IRP) to take over its management and work out a plan to protect the interests of homebuyers and creditors.
It had also restrained the managing director and directors of Jaypee Infratech from travelling abroad without its permission and asked the parent company, Jaypee Associates, to deposit the money.
The SC had asked Jaypee Infratech to hand over the records to the IRP for drafting of a resolution plan indicating protection of interests of over 32,000 hassled home buyers and creditors.
It had also stayed any other proceedings instituted against Jaypee Infratech for any purpose in any forum like the consumer commission, as IRP has been given control of the company's management.
The court had allowed Jaypee Associates to raise Rs 2,000 crore by selling land or properties and deposit them in the apex court registry by October 27.
The court had also appointed senior advocate Shekhar Naphade as amicus curiae to assist the proceedings of the IRP, which will submit a resolution plan indicating how to safeguard the interest of homebuyers and secured creditors.
Additional Solicitor General Tushar Mehta, appearing for Insolvency and Bankruptcy Board, had said that 627 units have been delivered to homebuyers since the proceedings against the company began.
Homebuyers, who had invested in the developer's projects, had moved the apex court saying that around 32,000 people had booked their flats and they are now dying and paying the installments.
With inputs from Housing News