The Supreme Court on Monday lifted a stay on insolvency resolution proceedings against Jaypee Infratech and ordered its parent, Jaiprakash Associates, to deposit Rs 2,000 crore with the court by October 27 to cover the unit’s liabilities towards homebuyers in its residential projects. It also asked the insolvency professional to draw up a resolution plan for the company within 45 days, which should take care also of the interests of thehomebuyers. The court prevented Jaypee Infratech from alienating any assets or creating third-party rights. The directors of both companies cannot travel abroad without the court’s permission. Monday’s order will allow resumption of insolvency resolution proceedings against Jaypee Infratech at the National Company Law Tribunal, initiated by IDBI Bank over a Rs 526 crore loan it defaulted.
The Supreme Court last week stayed the proceedings on a complaint by the homebuyers, who claimed that the process is under bankruptcy law, they would not get anything in case the company was liquidated. The stay on insolvency proceedings restored control and management of Jaypee over the company,” the AG said, while pointing out that the company owed more than Rs 10,000 crore to the public sector banking system. A three-judge bench, led by Chief Justice Dipak Misra, lifted the stay after hearing attorney general KK Venugopal, IDBI Bank counsel Abhishek Manu Singhvi and the insolvency resolution professional represented by additional solicitor general Tushar Mehta.
Courtesy/By: Shweta Pandey
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10 May 2019
