Surpeme Court Stays Proceedings Against Jaypee Infratech
The Supreme Court on September4 has stayed the insolvency proceedings against real estate firm, Jaypee Infratech, going on at the Allahabad National Company Law Tribunal (NCLT), initiated by the IDBI Bank for a default of a loan of Rs. 526 Cr. Thousands of homebuyers have not yet received possession of their flats booked with the company. The bench has also sought the replies of Reserve Bank of India and others on a PIL filed alleging that they have not received the flats, and the insolvency proceedings initiated against the company will render them without any remedy. The Court noted that the insolvency proceeding would severely disadvantage the homebuyers, since no decrees passed by the civil courts or consumer fora would be executed against Jaypee once the proceedings begin. The debt ridden realty firm has accumulated money from about 32,000 buyers who have put their hard earned money to the tune of Rs. 25,000 cr. in different projects, being developed by the Company. The homebuyers have also asked for a financial audit of Jaypee to evaluate the magnitude of the bankruptcy. IDBI, the financier for Jaypee had asked to lift the stay on the insolvency proceedings against Jaypee on the basis that it would not really benefit the buyers, and the Court is going to hear the plea soon.