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Supreme Court Allows Insolvency Resolution Professional To Take Over Jaypee Infratech Management

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Summary

Highlights of Monday’s order

  • Jaypee Associates, the parent company of Jaypee Infratech, told to deposit Rs 2000 crore.
  • IRP to submit interim resolution plan in 45 days, to also consider homebuyers’ interests.
  • MD and directors, other than nominee directors of lenders, of Jaypee Infratech and Jaypee Associates barred from leaving the country without court’s permission.
  • Amicus curiae appointed to assist proceedings by IRP.

The Supreme Court on Monday allowed insolvency resolution professional Anuj Jain, appointed by the National Company Law Tribunal, to take over the management of Jaypee Infratech Ltd. and asked its parent company to deposit Rs 2,000 crore.

The managing director and directors of Jaypee Infratech (at the time of initiation of insolvency proceedings) and of parent Jaypee Associates Ltd. cannot leave the country without the court's permission, the top court said, while allowing nominee directors of the lenders to do so.

The IRP will have to submit the interim resolution plan to court within 45 days, which will also consider the interest of the home buyers.

The court also appointed an amicus curiae who will also attend the meetings to represent the interest of the home buyers.

The National Company Law Tribunal on August 11 had admitted state-run IDBI Bank Ltd.’s plea seeking resolution under the Insolvency and Bankruptcy Code. The tribunal’s Allahabad bench appointed Anuj Jain as the interim resolution professional.

Homebuyers challenged the move, arguing that being unsecured creditors, they will not receive anything from the insolvency proceedings as the dues of financial institutions would be cleared first.

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