The Supreme Court on August 2 ordered status quo for two weeks on Jaypee Group’s plea against a National Company Law Appellate Tribunal (NCLAT) order that allowed fresh bidding for debt-laden Jaypee Infratech Ltd (JIL).
The order came after the court was told that Parliament had passed amendments to the Insolvency and Bankruptcy Code (IBC) that would resolve the issues coming in the way of the bidding process.
"We have not seen the amendment, let it come and we will see," justices AM Khanwilkar and Dinesh Maheshwari said. The changes in the code, cleared on August 1, are yet to be notified.
“The status quo granted by the court will ensure that liquidation will not happen. The amendments to IBC have not yet received presidential assent and therefore, the court deemed it fit to defer the matter by two weeks,” Aishwarya Sinha, lawyer for petitioner Chitra Sharma, said.
The court was hearing a plea by the parent company Jaypee Associates, the flagship firm of the group, that challenged an NCLAT order barring it from bidding for the embattled Jaypee Infratech.
On July 30, NCLAT had allowed extension of the corporate insolvency resolution process of the realty firm by 90 days, clearing the decks for calling fresh bids.
Barring Jaiprakash Associates, NCLAT said it was not eligible under an IBC section. It, however, permitted the government’s construction arm NBCC, whose bid was rejected by the Jaypee Infratech’s committee of creditors (CoC), to submit a new resolution plan.
This will be the third time that bids will be invited for Jaypee Infratech, whose more than 23,000 homebuyers have been waiting for their homes for almost a decade.
The NCLAT direction came after lenders rejected the resolution plan of the state-owned NBCC and Suraksha Realty in the second round of bidding.
The court on August 1 agreed to hear the appeal the next day after senior advocate Fali S Nariman, appearing for Jaypee Group, said that a bench headed by Chief Justice Ranjan Gogoi has allowed the listing of the petition. A CoC meeting was scheduled for August 5, so the appeal required to be heard urgently, he said.
The Lok Sabha on August 1 passed amendments to the bankruptcy code, which had already been cleared by the Rajya Sabha.
On July 11, the counsel for the homebuyers said they feared that Jaypee Infratech could be sent for liquidation to which the apex court observed that it may use its plenary power under Article 142 of the Constitution to protect the interest of the consumers if their grievances were not addressed.