A car drives past signage for the Jaypee Greens Wish Town Noida Integrated City as residential buildings stand under construction in the project in Noida, Uttar Pradesh. (Photographer: Prashanth Vishwanathan/Bloomberg)

Jaypee Infratech Insolvency: Homebuyers Welcome NCLAT Overturning Creditors’ Voting Process

Homebuyers described as ‘positive’ the National Company Law Appellate Tribunal decision to annul voting by creditors on NBCC (India) Ltd.'s bid to acquire debt-laden Jaypee Infratech Ltd. as bankers won’t be able to reject the offer.

Hearing a plea by IDBI Bank Ltd., a three-member bench of the NCLAT headed by Justice SJ Mukhopadhaya annulled the ongoing voting process. The bench also allowed nine homebuyers’ associations representing around 5,000 buyers to file an intervention application.

NCLAT said banks can renegotiate the offer made by state-run NBCC till May 30 and the voting process can start May 31 onward.

Reacting to this development, a homebuyers association office bearer Ashish Rustagi said the NCLAT order confirmed its support in favour of homebuyers.

“The judges have asked the IDBI Bank that they have to vote in support of resolution for homebuyers. The Committee of Creditors cannot fail the resolution in case banks vote negative. In the latter case, the resolution has to be brought to the NCLAT which will take a decision,” he said.

Another member Umesh Rastogi said homebuyers are only concerned about the completion of their flats.

“We want a resolution. We want our homes for which we have already paid the money, whether done by x, y or z,” he said.

“The government is trying to help the homebuyers but interested parties are creating hindrance. This decision (to annul voting) looks looks positive. NBCC is a government undertaking and we have faith in the government,” Rastogi added.

However, another homebuyer Krishan Mitroo said the NCLAT’s decision will only delay the process and proposed recalling Jaypee group to complete the pending houses.

“Involving the NBCC would only mean endless litigation. It's a government agency which is seeking favours and waivers at a time when the government itself wants to reduce NPAs (non performing assets),” he said.