Approximately 2300 Jaypee Infatech’s Wish Town project home buyers on Friday moved to the Supreme Court requesting it to ensure that the builder deposits the amount needed to complete the pending project and give compensation for the delay at 18 per cent per annum with the court or in an escrow account before re-initiating insolvency resolution process.
A group of 9 home buyers’ associations insisted that the interest of home buyers needs to be protected by the Apex Court before re-initiation of the insolvency resolution process of Jaypee Infratech, in their intervention application filed through Trilegal law firm.
They also demand a forensic audit into the Jaypee Infratech accounts and its holding company, Jaiprakash Associates, by an appropriate authority.
This application was a follow-up to the IDBI Bank moving to the Supreme Court on Thursday for vacating the stay on insolvency proceedings against Jaypee Infratech.
As per the application, home buyers pleaded that insolvency code IBC does not provide a suitable framework for the protection of home buyers’ interest and making the home buyers a test case for insolvency code will result in a grave injustice to the flat buyers.
Flat buyers are in the view that Jaypee Group and IDBI Bank colluded in initiating insolvency proceedings of Jaypee Infratech to defeat the principles of equity and justice and the interest of the flat buyers.
The application highlights that IDBI Bank has not invoked the personal guarantee provided by Jaypee Infratech promoter Manoj Gaur in relation to the IDBI loan till date. Home buyers argued that IDBI Bank being a public funded entity was obliged to take all measures to recover its loan including invoking personal guarantee.
Around 32,000 home buyers were left in the lurch after the Allahabad bench of the NCLT declared Jaypee Infratech insolvent on August 9 in response to IDBI Bank’s petition. Jaypee defaulted on Rs 526 crore loan from the bank.
The tribunal appointed Anuj Jain as interim resolution professional who has been given 270 days to turn around the company’s finances and assess whether resolution of its debt is possible, failing which the builder’s assets will be liquidated.
However, Supreme Court on 4 September stayed insolvency resolution proceedings against Jaypee till further orders on a plea by home buyers of Jaypee projects in Noida.
IDBI then filed a plea in the Supreme court to lift a stay on the insolvency resolution proceedings against Jaypee. The hearing is scheduled for September 11. The hearing of the home buyers’ plea is also expected on the same day.