Supreme court in April 2017 ordered the commencement of insolvency proceedings against Jaypee Infratech Ltd before the NCLT, Allahabad, and asked the interim resolution professional to seek fresh bids and other companies to take over. The corporate insolvency process must be completed within 270 days, if they fail they face liquidation.
Hundreds of homebuyers approached the Apex court through Advocate Ashwarya Sinha, seeking to stop the dissolution process, as the real estate giant Jaypee Infratech limited could not be completed with the allotted time which ended on May 6, 2019.
Although NCLT, Allahabad has dated the matter on May 21, it is providing some breathing space to investors and bidders, this happened because one of the creditor banks has approached the NCLT, Allahabad for extending the time for liquidation to start. This uncertainty has forced the homebuyers to move to the Supreme Court for their interest.
“ if no resolution plan is accepted till May 6, JIL will automatically go into liquidation, thereby leaving thousands of homebuyers in the lurch. Liquidation of the company will only be in the interest of banks who will be able to recover the money lent by them to the debtor,” the petition said.
The purpose of safeguarding the interest of 32,000 homebuyers who paid approximately Rs 14,000 crore, would be defeated by the liquidation. Since no amendment have been made to the definition of secured creditors to include homebuyers, they still fall under the category of unsecured creditors.
Homebuyers pleaded for a similar order against Jaypee to track diversion of funds which sparked financial issues, citing the case of Amrapali and Unitech.