Hassled homebuyers waiting for their homes to be delivered in Jaypee's Wish Town project have been forced to knock on Supreme Court's doors to ensure their interests are protected.
Here's a timeline of the events that have transpired till now:
In 2007, Jaypee Infratech had proposed to build 32,000 flats and sell some plots in Noida.
These flats were part of the Integrated Wish Town project located in Sectors 128, 129,131, 133 and 134 along the Noida-Greater Noida Expressway
Jaypee Infratech, which developed the 165-km Yamuna Expressway and Formula One circuit, promised buyers that the flats would be delivered in 2011-12
It has delivered around 12,000 flats and a few hundred plots.
But it failed to deliver around 20,000 flats in its Wish Town and Jaypee Aman projects.
The company also defaulted on bank loans from a consortium of banks
On August 8, 2017, IDBI Bank petitioned the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against Jaypee Infratech for defaulting on loans worth Rs 526 crore
NCLT Allahabad admitted the IDBI application under IBC against corporate debtor JIL. This is called CIRP-1.
An Insolvency Resolution Professional (IRP) was appointed and homebuyers filed claims in August 2017.
In September 2017, a set of homebuyers approached SC with a writ petition.The case was listed as ‘Chitra Sharma and others’. Later large number of homebuyers impleaded in the matter.
The same month, the Supreme Court stayed the insolvency resolution process
It ordered the holding company Jaiprakash Associates to deposit Rs 2000 crore with the court registry by October 27, 2017
By March 2018, the company deposited only Rs 550 crore.
The court directed Jaiprakash Associates to deposit Rs 200 crore in two installments by May 2018.
Between December and May 2018, the Insolvency Resolution Professional (IRP) invited bids from interested buyers to buy Jaypee’s assets in the project
Cube Highways, Suraksha and Adani were selected as qualified bidders
Cube Suraksha Realty was shortlisted as the highest bidder, but the Committee of Creditors rejected the bid on technical grounds
Jaiprakash Associates’ resolution plan for the project also rejected on financial and technical grounds
NCLT also declared Jaiprakash Infratech’s move to mortgage 758 acres of land to secure a loan from the holding company as a fraudulent transaction
In June 2018, the Supreme Court directed Jaiprakash Associates to deposit Rs 1000 crore
In the same month, the government promulgated an ordinance to amend the Insolvency and Bankruptcy Code (IBC). Homebuyers became financial creditors. But there was no clarity on whether they are secured or unsecured financial creditors.
They were treated at par with banks and institutional lenders and were part of the Committee of Creditors. They were empowered to co-drive the process of resolution of the real estate firm
The banks who were part of the COC of CIRP-1 considered all bids and finally rejected the bid of Suraksha Reality, the reason given was that the bid of 7500 crore was below liquidation value
During the intervening period from Aug 2017 to Aug 2018 when SC was seized of the matter, the NCLT Allahabad and NCDRC Delhi did not pass any orders
The case WRIT PETITION (CIVIL) NO 744 OF 2017 was finally decided by SC on August 9, 2018 and the matter was sent back to NCLT Allahabad.
The Corporate Insolvency Resolution Process timelines of 270 days were reset and CIRP-2 restarted from Aug 9, 2018
New Committee of creditors (COC) was formed with homebuyers having 59% voting share. The IDBI lead consortium of banks and other financial institutions had 40 percent voting share. The remaining 1 percent was held by fixed deposit holders.
The CIRP-2 process completed its 270 days from Aug 9, 2018 till May 6, 2019. This period has now been extended by NCLT Allahabad till July 29, 2019.
During these 270 days the various bids were considered and the banks once again voted against the bid from Suraksha. The home buyers voted in favour of the bid, but in the absence of cooperation from banks, the resolution could not muster the required 66 percent votes mandatory for passing the resolution.
Once Suraksha bid was not approved the next alternate proposal from NBCC was considered by COC and it was put to vote starting May 16, 2019.
Homebuyers started voting from May 16, 2019 but the banks went to NCLAT, Delhi on May 17, 2019 and got a stay order on the voting.
The NCLAT ordered that banks were free to vote as per their wish but in case the COC decides to reject the bid of NBCC then it should be placed in front of NCLAT before taking any final decision
Banks took two weeks to negotiate the bid with NBCC between May 17 to May 30, 2019 and the revised bid of NBCC was again put to vote on May 31, 2019 for 10 days.
Homebuyers again voted in favour of NBCC over the next 10 days and on the day of the voting IDBI again went to NCLAT seeking permission to vote against NBCC
The court clarified that it had never passed any order on what to vote for, hence their petition was premature. Justice Mukhopadhaya said the order clearly explained that the result of voting should be placed before the bench in case the CoC decided to reject the bid of NBCC. The hearing was scheduled for July 2, 2019
On July 30, the NCLAT had allowed fresh bidding for the cash-strapped Jaypee Infratech but barred its promoter Jaypee Group from participating in the auction
On August 22, the Supreme Court ordered status quo for a week on the insolvency proceeding after the Jaypee Group challenged an order of the National Company Law Appellate Tribunal (NCLAT) that allowed fresh bidding for Jaypee Infratech. The NCLAT had barred the parent company, Jaypee Associates, from bidding
On September 3, the apex court had sought to know from NBCC whether it was willing to give a revised proposal to complete the stalled projects of Jaypee Group
On September 5, 2019, NBCC had agreed to submit a revised proposal to take over the embattled company’s unfinished units. During the hearing, the Centre had told the court that it would waive taxes, running into crores, due to Jaypee Infratech, if NBCC was to take over the embattled real-estate firm
On October 17, 2019, NBCC submitted its revised resolution proposal but it was returned. Jaypee Infratech insisted that its appeal be heard and proposal considered. SC to decide matter on October 22, 2019.
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