To protect the interest of 21,532 homebuyers of embattled Jaypee Infratech (JIL) who are seeking possession of their flats, Jaiprakash Associates (JAL) on Thursday urged the Supreme Court to get its financial capability evaluated by an expert body before deciding on the future course of action. While the total value of JIL’s assets, including those mortgaged to bankers is estimated at Rs 32,882 crore, JIL’s assets provided as security to bankers alone are worth about Rs 17,116 crore with a distress value of Rs 14,548 crore (as per the figures given by the IDBI lead-bank to the National Company Law Tribunal (NCLT), Allahabad, in June 2017), JAL senior counsel Fali Nariman told a bench led by Chief Justice Dipak Misra.
The bench, after hearing all stakeholders, including the parent company, JAL, the resolution professional for JIL, the Insolvency and Bankruptcy Board of India (IBBI), homebuyers and the lender banks, reserved its interim order on how to protect the interests of homebuyers as the corporate insolvency resolution period for JIL expired unsuccessfully in May this year. While IBBI suggested re-constitution of a committee of creditors which would include the homebuyers, the IRP urged the apex court to constitute an independent committee under a retired Supreme Court judge to assess the financial capability of both JIL and JAL or any other company who was interested in taking over the Wishtown housing project in Noida. Nariman further said that “the IRP’s proposal that first an independent person or persons may be appointed to evaluate the financial capability of JAL/JIL to continue executing the ongoing existing projects should be accepted and then if it is stated by an expert body that JAL/JIL do not have the financial capability, consider what future steps be taken.”
Stating that the ongoing project where it had delivered 11,200 flats in 79 towers should not be stopped midway, JAL argued that 92% of 21,532 homebuyers who have preferred possession over refund have expressed their confidence in the willingness and ability of JIL/JAL to complete the project. JAL also claimed that its 32 lenders lead by ICICI Bank have agreed that JAL “has honoured its obligations under Debt Realignment Plan” and “its operations have started showing signs of revival; therefore, the lenders were advised to release requisite working capital limit to JAL after taking requisite internal approvals…”
Homebuyers also argued that an independent committee be set up which can assess the financial health and credibility of interested bidders who have expressed interest in taking over the project and complete construction. Even they argued that the statutory time period as provided in the IBC should be increased so that the interested bidders can revise and resubmit their bids before the new CoC which will have the participation of homebuyers now. However, initiation of liquidation proceedings against JIL was unanimously ousted by all stakeholders to protect the right of the homebuyers.