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F1 circuit case: Allahabad High Court asks Jaypee to deposit Rs 100 cr before next hearing

Jaypee Group said it would abide by the court order,

Almost a fortnight after Yamuna Expressway Authority cancelled the allotment of  1,000 hectares in Greater Noida in possession of Jaypee group, on which the country's only F1 circuit is built, over non-payment of dues, the Allahabad High Court has ordered the company to pay Rs 100 crore before the next hearing in April.

The Yamuna Expressway Industrial Development Authority (YEIDA) had cancelled the 1,000 hectares FI track allotment on February 13, 2020. The decision to cancel the land allotment was taken by YEIDA during its 66th board meeting on December 21, 2019.

"While the order is not yet out, we have learnt that the court has directed Jaypee Sports Limited to deposit Rs 100 crore with YEIDA before the next date of hearing which is slated to take place in the first week of April. We will abide by the court’s order. If the cancellation stands subject to the court’s scrutiny, we may go in for a global tender as this is the rarest of rare sports facility in the country. The facility should be kept as it is and through a global tender we would want to get a developer on board to manage it," Arun Vir Singh, chief executive officer, YEIDA, told Moneycontrol.

He said that Jaypee Sports Limited owes Rs 1000 crore to YEIDA - Rs 900 crore plus Rs 100 crore as bank guarantee.

"The payment was to be made in 10 years but that has not been done. They have also defaulted thrice," he claimed.

Close

Over 1,000 hectare land was allotted to the Jaypee Sports Limited, an affiliate of Jaypee group, in a special development zone along the Yamuna Expressway in 2009. Besides the F1 racing track, the area has a cricket stadium and 10 housing projects.

Jaypee group, however, claimed that it owed YEIDA only about Rs 200 crore.

"We have already paid Rs 2,400 crore, including Rs 1,000 crore as interest to the authority against land payment over an eight year period. At one time only Rs 400 crore was due from our end but the authority is insisting on a 20 percent interest which makes it Rs 900 crore as on date. We will abide by the high court decision and deposit the Rs 100 crore as per the court order but the authority cannot cancel the entire allotted land," a Jaypee representative said.

Earlier this month, Jaypee group had questioned the YEIDA's cancellation-notice and said it will challenge it in court on the grounds that the lack of fulfilment of obligations on part of the authority has come in the way of completing the project.

A spokesperson for the Jaypee group had said the company would take the matter to court on the grounds that the "lack of fulfilment of obligations on part of authority has come in the way of completing the project, where 90% obligations have been met by the company".

"The move by authority is regressive as the racing track infrastructure that hosted the F1 race, and put India and the state of Uttar Pradesh on the global racing map is being cancelled. Such a move will be detrimental to attracting investment in the country and the state,” the spokesperson had said.

"The motive of the authority is further questionable in the backdrop of the fact that the government is seeking investment by private sector, whereas on-ground, a lease has been allotted and cancelled despite meeting 90 percent of the obligations. Jaypee has completed 90 percent of its obligations by way of depositing Rs 2400 crores towards land payment till date," the spokesperson had said.

The company had invested Rs 2,000 crore towards construction of motor race track and other related developments such as cricket stadium, he added.
Vandana Ramnani
first published: Feb 26, 2020 04:58 pm

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