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Supreme Court Refuses Nod To JP Associates For Yamuna Expressway Sale

JP Associates gets more time to deposit the stipulated Rs 2,000 crore to cover liabilities of homebuyers.

A security guard walks towards residential buildings under construction at the Jaypee Wish Town Project (Photographer: Prashanth Vishwanathan/Bloomberg)
A security guard walks towards residential buildings under construction at the Jaypee Wish Town Project (Photographer: Prashanth Vishwanathan/Bloomberg)

The Supreme Court today declined to allow Jaiprakash Associates Ltd. to hive off the Yamuna Expressway project but gave it more time to deposit the stipulated Rs 2,000 crore to cover liabilities of Jaypee Infratech Ltd’s homebuyers.

The apex court’s order comes on a plea filed by Jaiprakash Associates, the parent company of Jaypee Infratech, proposing the sale of the 165-kilometre expressway. This would allow the Manoj Gaur-led company to raise Rs 2,500 crore which will be used to deliver flats or refunds to homebuyers.

The bench, comprising Chief Justice of India Dipak Misra, Justices AM Khanwilkar and DY Chandrachud, disposed of the application but gave the company time till November 5 to raise the amount versus an earlier deadline of October 27.

Jaypee Infratech has defaulted on Rs 526.11 crore of loans outstanding to IDBI Bank. It was among the 12 companies against whom the Reserve Bank of India, through a June 13 directive, had asked banks to initiate insolvency action.

Thereafter, proceedings were initiated by the National Company Law Tribunal at Allahabad but was challenged by hundreds of homebuyers of Jaypee Infratech who ran the risk of losing their apartments and not getting any compensation. These buyers had paid for houses in Jaypee Wish Town, a residential complex being developed by the company in Noida, and were worried that any resolution under the IBC would give lenders preference in repayment.

While the apex court at first stayed the insolvency proceedings, it later revived the proceedings handing back the control of the company to the Interim Resolution Professional. The top court had asked the IRP to come up with a plan to protect the interests of the home buyers and barred the directors of both Jaiprakash Associates and Jaypee Infratech from leaving the country.