Jaypee Infratech insolvency case: Relief for homebuyers who fought a decade-long legal battle

Homebuyers welcomed the National Company Law Tribunal’s (NCLT) 491-page order on March 7 that cleared the bid by a consortium of Suraksha Realty and Lakshdeep Investments and Finance to take over  Jaypee Infratech Ltd (JIL), paving the way for the completion of almost 20,000 stuck homes in Noida and Greater Noida.

In 2003, JIL had signed a concession agreement with the Yamuna Expressway Industrial Development Authority (YEIDA) for the right to collect toll on the expressway for 36 years and was allotted 25,000 hectares of land for development across five places including Noida and Greater Noida and near Dankaur.

In 2007, JIL had proposed to build close to 32,000 housing units and plots and deliver the projects starting 2012.  There were close to 24 projects – 15 in Noida, eight close to Yamuna Expressway and one in Agra. As many as 12,000 flats and a few hundred plots have been delivered.

The resolution plan submitted by Suraksha Realty and Lakshdeep Investments and Finance to take over JIL had proposed to hand over the remaining projects in the next six months to 42 months of the plan being approved by NCLT.

This is expected to provide relief to around 20,000 homebuyers who have been waiting for their homes for more than 10 years.

Most of them are hopeful that their homes will be completed as per the schedule proposed by Suraksha in the resolution plan and are looking forward to receiving the keys to their apartments.

They are hoping that their units would be completed within six months to around three years, depending on the stage in which their project is in.

Most homebuyers have paid more than half of the unit cost to Jaypee Infratech and had all along been paying both the equated monthly instalments (EMIs) as well as rent.

Some booked their units when they were in their 40s and 50s. While some have retired from service, there are quite a few who have died.

Capt Mrinal Chakraborty booked his flat in 2011 when he was 50. Today, he is 62 years. He has paid approximately Rs 1 crore for his house and around Rs 30 lakh still remains to be paid. He hopes that Suraksha would resume construction soon and complete all projects on time.

“We homebuyers only pray and hope that Suraksha will start the process of resuming construction in all projects immediately. This has been their promise all along. Our wait for more than a decade has ended and homes must be delivered soon. We have been a victim for too long, now we are soon to be home owners. That’s our wish. Finally, justice has been delivered and our patience and trust in the judiciary remains strong,” he said.

“We homebuyers, especially those whose project construction was stopped since 2014, have some hope of getting homes in the next 2.5 years,” said Jayashree Swaminathan, who booked a 2,100-sq ft apartment in Kensington Park Heights in Noida in 2009.

Prolonged legal battles ahead?

However, some fear prolonged legal battles ahead. “The insolvency process, which is supposed to be completed within six months under the IBC Code, took six long and painful years in this case,” said Abhishek Dubey, a homebuyer in Jaypee Kosmos project.

“While we homebuyers look forward to expedited construction under the ownership of Suraksha, we are also very sceptical as this order may again be challenged at NCLAT and then at the Supreme Court.”

What did the order say?

A two-member principal bench of the NCLT, headed by Ramalingam Sudhkar, approved the resolution plan on March 7 in a 491-page order.

It directed the interim resolution professional to set up an implementation monitoring committee within seven days.

The committee is expected to include representatives of the Suraksha Group, insolvency resolution professional Anuj Jain, the lenders, and the authorised representative of the homebuyers.

The successful resolution applicant (SRA) should deliver the units for possession by the homebuyers concerned as per the time frame promised in the resolution plan, the bench said.