Supreme Court asks Jaypee Infratech to deposit Rs 2000 crore

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Noticing that Jaypee Associates Ltd (parent company of Jaypee Infratech) was not party to the insolvency proceedings, the court directed the company to deposit Rs2,000 crore to the court by 27 October to safeguard the interest of homebuyers.

"We are interested and concerned with the home buyers who are middle class and we are not concerned with the company", the Supreme Court said.

Many home buyers have been protesting outside the company's office in Noida. The court also discussed the issue of homebuyers being made part of the committee of creditors, Rai informed.

It was reported that Supreme Court restricted Managing Director directors of Jaypee Infratech from moving out of the country and asked to deposit Rs 2000 crores by October 27 this year.

They had pleaded that the insolvency code does not provide a suitable framework for the protection of interest of home buyers and makes the flat buyers a test case for insolvency code would result in a grave injustice to the home buyers.

However, Attorney General K.K. Venugopal had suggested to the court that the IRP be given more time to formulate a plan so that everybody's interest is taken care of.

The latest development in an ongoing suit where homebuyers have challenged the company's move to declare itself bankrupt, will give some respite to more than 30,000 buyers of Jaypee Infratech in Noida and Greater Noida who are anxious that the insolvency proceedings would leave them in a lurch.

But last month, the Supreme Court put the insolvency proceedings on hold after homebuyers petitioned it to ensure their investments were protected.

Legal experts said the apex court's ruling could set a precedent in terms of how it balances the rights of lenders versus those of homeowners or the public at large.

Around 32,000 persons had booked flats in the projects of Jaypee Infratech. They claimed they would be at the mercy of insolvency resolution process, as the dues of financial institutions would be cleared first.

All the homebuyers submitted a plea of the IDBI Bank for commencing insolvency proceedings against the debt-ridden company for defaulting on Rs 526-crore loan. Jaypee Infratech is a subsidiary of Jaiprakash Associates Ltd.

A day later IDBI Bank urged the Supreme Court to lift the stay order on insolvency proceedings against the real estate developer, saying the move would not benefit home buyers.

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