Jaypee Greens Wish Town Noida Integrated City, in Noida, Uttar Pradesh. (Photographer: Prashanth Vishwanathan/Bloomberg)

Supreme Court Bars Jaypee Associates’ Directors From Selling Assets

The Supreme Court today barred 13 independent directors , including five promoters, of Jaypee Associates Ltd. and their immediate family members from selling assets until further orders.

The apex court bench, comprising of Chief Justice of India Dipak Misra and Justices AM Khanwilkar and DY Chandrachud, also made it clear that the directive to Jaypee Associates to deposit Rs 2,000 crore to cover liabilities of homebuyers remains unchanged, but allowed them to deposit the amount in installments.

An amount of Rs 275 crore was deposited by the company with the court registry today. After this, the company’s liability stands at Rs 1,725 crore. The court has directed that Rs 150 crore be deposited by Dec. 13 and another Rs 125 crore by the end of December.

At the last hearing, Jaiprakash Associates’s offer to deposit Rs 400 crore towards the due amount of Rs 2,000 crore had been rejected by the court.

Senior Advocates Mukul Rohatgi and Ranjit Kumar, who appeared on behalf of directors and promoters of the company, said they have filed affidavits following an earlier court direction to furnish details of personal properties.

The bench has now posted the homebuyers’ plea for further hearing on Jan. 10 and directed all the directors to appear again before it on that date.

Why A Stay On Insolvency?

Homebuyers, including one Chitra Sharma, had moved the apex court, seeking a stay on insolvency proceedings on the company at the National Company Law Tribunal, and said that around 32,000 people had booked their flats in a project initiated by the real estate company and are now paying installments.

Flat buyers, under the Insolvency and Bankruptcy Code, do not fall in the category of secured creditors like banks, and hence, can get back their money from what is left after repaying the secured and operational creditors, Sharma had said in her plea.

The top court had on Sept. 4 stayed insolvency proceedings against the real estate firm at NCLT but later allowed the proceedings to resume. The court has asked the Insolvency Resolution Professional to come up with a resolution plan with the interests of the homebuyers in mind.

(With PTI inputs.)