The Centre informed the Supreme Court on Thursday that amendments to the Insolvency and Bankruptcy Code (IBC) give appropriate weightage to homebuyers to protect their interest.
The Cabinet on Wednesday cleared the amendments that seek to put in place a 330-day deadline for corporate resolution process, including litigation and other judicial processes, as well as make resolution plan binding on all stakeholders.
The Centre told this to a bench comprising justices A M Khanwilkar and Dinesh Maheshwari, hearing the homebuyers matter of Jaypee Infratech Ltd (JIL).
The government said the National Company Law Appellate Tribunal, which is seized of a matter related to the JIL homebuyers case, is scheduled to hear the issue on July 22.
The bench, after hearing the submissions, posted the matter for hearing on August 1.
Last week, the top court said it may use its plenary power under Article 142 of the Constitution to protect the interest of over 21,000 homebuyers in the JIL case, if their grievances are not addressed.
The Centre told the court that it is working on a proposal to address grievances of homebuyers and it would be submitted in the pending Unitech homebuyers case by July 23 as per the direction of the apex court in that matter.
The counsel appearing for the homebuyers had said they apprehend that JIL may be sent for liquidation which could hamper their interest.
The court is hearing a plea which has sought that JIL be not sent into liquidation, although the deadline for the corporate insolvency resolution process is over, as it would cause “irreparable loss” to thousands of homebuyers.
On August 9 last year, the apex court ordered re-commencement of the resolution process against JIL and barred the firm, its holding company and promoters from participating in fresh bidding process.
It allowed the Reserve Bank of India to direct banks to initiate corporate insolvency resolution proceedings (CIRP) against Jaiprakash Associates Ltd (JAL), the holding company of JIL, under the IBC.
It said there was “no manner of doubt” that JAL and JIL lacked financial capacity and resources to complete unfinished housing projects in which over 21,000 homebuyers had not been given the possession of their flats till then.
The fresh plea filed in the top court has sought a direction that an “independent and thorough forensic audit” of JIL should be conducted from the date of its incorporation.
As per the apex court’s direction, the 270 days for completion of CIRP have concluded on May 6, it has said.
It has said if no resolution plan is accepted till May 6, JIL would “automatically go into liquidation”, leaving thousands of homebuyers without any remedy.