Tower cranes operate while laborers work at residential buildings under construction at the Jaypee Wish Town Project, developed by Jaypee Infratech Ltd. (Photographer: Prashanth Vishwanathan/Bloomberg)

Supreme Court Suggests JP Associates Refund Rs 650 Crore To Homebuyers

The Supreme Court today suggested that realty firm Jaiprakash Associates Ltd. should refund Rs 650 crore to hassled homebuyers, instead of Rs 1,000 crore as ordered earlier.

A bench headed by Chief Justice Dipak Misra asked Senior Advocate FS Nariman, representing JP Associates, to take instruction from the company on depositing Rs 650 crore with the Supreme Court registry. It added that after the amount is deposited, the court would ask the National Company Law Tribunal at Allahabad to expeditiously decide the firm’s plea on revival or restructuring of its subsidiary firm Jaypee Infratech Ltd.

The Supreme Court bench, which also comprised Justices AM Khanwilkar and DY Chandrachud, had on May 16 directed JP Associates to deposit Rs 1,000 crore by June 15. That was in addition to Rs 750 crore already deposited to provide refunds to the homebuyers who wished to opt out of its various housing schemes.

The homebuyers’ case can be disposed off if JAL deposit Rs 600 crore for refund of the principal amount. We will ask the NCLT to decide the company petition of JAL
Supreme Court Bench

The court also made it clear that it would deal with the issue of refund to only those homebuyers who do not want possession of their homes.

The homebuyers, registered with the portal for seeking refund, have to be paid Rs 1,379 crore and so far Rs 750 crore have been deposited with the Supreme Court registry, leaving a shortfall of almost Rs 650 crore for refunding the principal sum to them, according to advocate Pawan Shree Agrawal, who is assisting the court as an amicus curiae.

A motorcyclist ride past residential apartment buildings on the outskirts of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)
A motorcyclist ride past residential apartment buildings on the outskirts of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

At the outset, Nariman said that as many as 17 proposals for reviving Jaypee Infratech have been rejected so far. JP Associates has entered into agreements with a bank which has agreed to issue a letter of credit up to Rs 1,000 crore subject to certain conditions like mortgaging of properties, he added. “I want a letter of credit from a bank which would say that it will deposit Rs 1,000 crore, provided the NCLT disposes off the petition of JAL on revival of JIL.”

The bench then asked JP Associates to deposit Rs 600 crore, saying it would ask the NCLT to decide its plea as soon as possible. It fixed the matter for further hearing on July 13.

Also read: NCLT Asks Jaiprakash Associates To Return Jaypee Infra’s Land; Reverses Previous Transactions

Earlier, the apex court had asked JP Associates to deposit Rs 1,000 crore by June 15 and made clear that on submission of the amount, the liquidation proceedings against Jaypee Infratech shall remain stayed. It had also asked the amicus curiae to disburse the money to the homebuyers on a pro-rata basis.

JP Associates had said that it has been delivering possession of 500 dwelling units every months to homebuyers and moreover, 92 percent homebuyers wanted possession of their homes.

The homebuyers had moved to the Supreme Court stating that around 32,000 people had booked flats and were now paying installments. The plea had also stated that hundreds of homebuyers were left in the lurch after the NCLT, in August last year, admitted IDBI Bank Ltd.’s plea to initiate insolvency proceedings against the debt-ridden realty firm for allegedly defaulting on a Rs 526 crore loan.

Also read: Jaiprakash Associates Far From A Turnaround Despite Asset Sales