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A day after the Supreme Court’s stay on Jaypee Infratech's insolvency proceedings, IDBI Bank has asked the court to restore the process as buyers plan to take the fight to a more aggressive path. The next date of hearing has been set for September 11, add sources.
While on one hand, the IDBI Bank moved the apex court on Tuesday seeking restoration of insolvency proceedings against Jaypee, the distraught buyers, on the other hand, plan to assail the developer with 4,000 more individual cases, both civil and criminal.
Abhishek Manu Singhvi representing the bank submitted to SC that the Insolvency Resolution Professional appointed by NCLT will take care of homebuyers.
"IDBI Bank, which has a debt of Rs 4000 crore out of a total consortium debt of Rs 10,000 crore equally represents public money and is acting under RBI guidelines as custodian of public monies. A blanket SC stay has the wholly unintended effect of restoring company into the hands of JP. The insolvency professional is much better equipped to deal with claims and counter-claims of homeowners rather than throwing back the letter into the hands of JP, who is the principal perpetrator of homeowners' distress and borrower of Rs 10,000 crore of public monies,"says Singhvi.
On Monday, the Supreme Court stayed the NCLT's (National Company Law Tribunal) insolvency proceedings against Jaypee Infratech, bringing relief to approximately 40,000 homebuyers who invested their money in the real estate major's housing projects in the national capital region (NCR).
According to reports, IDBI has looking to get a go ahead to recover its dues worth Rs 526 crore from the defaulting company.
"By staying the insolvency process the court gave the company back to its promoters,” the bank told the court, according to a report in the Livemint.
After the Supreme Court stay, the buyers have got the confidence to fight the legal battle with more vocal protests, meeting various ministers, sending letters to the prime minister’s office and filing of police complaint.
"The plan is to bombard them with multiple court cases, so that the developers remain engaged and tangled in legal hassles. They are a huge company but even for them to handle 4,000 individual cases would be a lot. There are home buyers who have already filed court cases over non-delivery of the promised property and cheating, among other charges. More are planning to do the same over the next few weeks,” Pankaj Gupta, a buyer in Jaypee Wish Town’s Kensington Park Apartment project told the Business Standard.
Many are also planning to file a new lot of police cases for cheating them.
The apex court will now hear the homebuyers' plea in the case on October 10.
Homebuyers who had invested in Jaypee's residential projects have been put through the grind of late with a number of changes that have been at best confusing. At the heart of their confusion lies the forms which are available for homebuyers to file their claims. In addition to an earlier form, Insolvency and Bankruptcy Board of India has introduced another form.
Last month, the Allahabad bench of the NCLT passed an order starting insolvency proceedings against Jaypee Infratech, a subsidiary of Jaiprakash Associates.
As per reports, the lawyer on behalf of the petitioners argued that the NCLT order has put the homebuyers in a disadvantaged position as the order required them to fill up certain forms which will stop them from moving consumer courts. The lawyer also said the homebuyers are worried about their investments in the company's projects.
The buyers have also asked for a forensic audit of Jaypee Infra and its holding company Jaiprakash Associates to evaluate the magnitude of their bankruptcy.
Buyers of Jaypee’s flats were thrown off guard by recent developments. To make matters worse, the Insolvency and Bankruptcy Board of India (IBBI) introduced a new form to file claims.
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