Chitra Sharma, a homebuyer, moved the Supreme Court on Monday against an order of its registrar, which declined to entertain an application for the modification of an August order that had remanded the insolvency case against Jaypee Infratech Ltd (JIL) to the National Company Law Tribunal (NCLT) to be started afresh.
On 9 August, a bench headed by former chief justice Dipak Misra, had sought to protect the interest of homebuyers and remanded the issue back to the NCLT at Allahabad to start afresh and sought the formation of a new committee of creditors that would include home buyers.
Sharma has sought modification of the August order on the grounds that homebuyer’s interest to the extent of their status as “secured” or “unsecured creditors” was still undecided. Sharma’s petition added that after a series of litigation, the petitioner’s relief stands stalled until the new litigation under the Insolvency and Bankruptcy Code (IBC) was decided, which would take a year at the least.
The matter, which involved Jaypee’s Noida-based township project, was brought before a bench headed by Justice Madan B. Lokur who said that it would come up for hearing before an appropriate bench.
A time frame of 180 days, starting 9 August, was laid down for completion of such proceedings, with an extension of 90 days if deemed necessary by the tribunal.
The court had also allowed the Reserve Bank of India to direct banks to take forward insolvency proceedings against JIL’s parent company, Jaiprakash Associates Ltd.
“Due to the apex court not deciding on whether home buyers are secured creditors or not, a vacuum was created to the detriment of the home buyers. The court also lost sight of the fact that the defective mechanism of voting in the corporate insolvency resolution process (CIRP) worked to the disadvantage of the home buyers,” Sharma claimed.
Under an amendment to the IBC in June, homebuyers would be treated at par with financial creditors and get to decide on a company’s future along with lenders.
The insolvency professional will now invite bids for the firm, keeping out promoters of JIL and JAL. Under the IBC, promoters can bid for winning back their firms only if they repay dues to creditors. The three bidders who have evinced interest, Adani Infrastructure and Developers Pvt. Ltd, a consortium of Lakshdeep Investments & Finance Pvt. Ltd and a consortium of Cube Highways and Infrastructure Pte. Ltd and Kotak Investment Advisors Ltd, will get another chance to revise their bids.
Source: Livemint, December 10,2018