Supreme Court stays NCLT’s insolvency proceedings against Jaypee Infratech

Jaypee group stay

In a big relief for 32000 aggrieved home buyers trapped in projects of Jaypee Infratech, Supreme Court of India today ordered a stay on the National Company Law Tribunal (NCLT) initiating insolvency proceedings against the real estate company. The apex court was hearing a plea filed by several home buyers who had booked flats in several projects of Jaypee Infratech.

Chief Justice of India Dipak Misra also issued notice to Jaypee Infratech on a plea by home buyers who had not received possession of their flats despite paying around 90 percent of the amount.
Flat-buyers had contended before the court that they will neither get a home nor a refund of their hard earned money on the account of being “unsecured creditors”.

“Around 32,000 buyers have booked their homes in 27 different housing projects of Jaypee Infratech and they are left in the lurch as the insolvency proceedings have been started against it,” senior advocate Ajit Sinha, appearing for 24 flat-buyers had said earlier.

As per the provisions of insolvency proceedings, the financial interest of secured creditors takes precedence over that of flat buyers who have been tagged under the category of unsecured creditors.

Thousands of home buyers have been left in the lurch after National Company Law Tribunal (NCLT), admitted the IDBI Bank’s plea on August 10, for initiating insolvency proceedings against the debt-ridden real estate company for defaulting on Rs 526-crore loan.

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