SC Tells Jaypee Infratech (JIL) To Deposit Rs. 2,000 Cr, Directors Shall Not Leave India [Read The Modified Directions]

Today's Directions;

a) The IRP shall forthwith take over the Management of JIL. The IRP shall formulate and submit an Interim Resolution Plan within 45 days before this Court. The Interim Resolution Plan shall make all necessary provisions to protect the interests of the home buyers;

b) Mr.Shekhar Naphade, learned senior counsel along with Ms.Shubhangi Tuli, Advocate-on-Record, shall participate in the meetings of the Committee of Creditors under Section 21 of the Insolvency and Bankruptcy Code, 2016 to espouse the cause of the home buyers and protect their interests;

c) The Managing Director and the Directors of JIL and JAL shall not leave India without the prior permission of this Court;

d) JAL which is not a party to the insolvency proceedings, shall deposit a sum of Rs.2,000 crores(Rupees two thousand crores) before this Court on or before 27.10.2017. For the said purpose, if any assets or property of JAL have to be sold, that should be done after obtaining prior approval of this Court. Any person who was a Director or Managing Director of JIL or JAL on the date of the institution of the insolvency proceedings against JIL as well as  the present Directors/Managing Director shall also not leave the country without prior permission of this Court. The foregoing restraint shall not apply to nominee Directors of lending institutions (IDBI/ICICI/SBI);

e) All suits and proceeding instituted against JIL shall in terms of Section 14(1)(a) remain stayed as we have directed the IRP to remain in Management.

Expressing concern over middle-class home buyers, the Supreme Court on Monday directed Jaypee Infratech [JIL) to deposit Rs. 2,000 crore with the apex court registry within 45 days.

The court also restrained its real estate promoters, directors and managing director from traveling abroad without this court's permission.

"You can't be so selfish. This is a human problem with great magnitude. We are only concerned about the home-buyers. We are not concerned about the company. The companies can drown in the Bay of Bengal," Chief Justice of India Dipak Misra observed.

The real estate firm directors were also restrained from selling properties from any of its projects.

The court also handed over the management of Jaypee Infratech to insolvency resolution professional (IPR).

It ordered IPR to come out with a proposal keeping in view the interest of more than 30,000 buyers and place it before the court.

The court indicated to appoint a person to represent homebuyers before the insolvency board.

The court, however, stayed all proceedings against Jaypee in any other forum.

The insolvency proceedings against Jaypee were admitted by the Allahabad bench of National Company Law Tribunal on August 9 after IDBI Bank, the lead consortium of lenders to the construction firm, moved a petition that the company defaulted on a Rs. 526-crore loan.

A battery of senior advocates Ajit Sinha, Anand Grover and P Chidambaram appeared for home buyers and requested court to protect the interest of flat buyers.

Attorney General for Government of India KK Venugopal  and Additional  Solicitor General Tushar Mehta for Insolvency Board submitted that the management of the firm should be handed over to interim resolution professional.

Senior advocate AM Singhvi appeared for IDBI bank, one of the banks which have given loans to a large number of home buyers in Jaypee projects on Expressway.

Appearing for the realtor firm, two senior advocates PS Patwalia and RS Suri informed the court that until the flats were sold, the amount of Rs. 2,000 crore cannot be deposited.

The counsel argued that it has been working for the development of the area through its large number of projects on Expressway Noida.

The CJI said: "You can give thousands of certificates for yourself, but the court is concerned about the middle-class homebuyers and their benefits" and dismissed the argument.

The bench has now fixed November 13 for further hearing of the matter.

Read the Order here