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Can pay homebuyers by hiving off Yamuna Expressway project: Jaypee to SC

Earlier, the Jaypee Group had told the apex court that the company needs to raise funds to deposit Rs 2,000 crore in the apex court registry for paying the troubled home buyers

Press Trust of India  |  New Delhi 

Yamuna Expressway
File photo of Yamuna Expressway (Photo courtesy: Jaypee website)

The Supreme Court on Monday said it "must be clarified" whether the multi-crore six-lane Yamuna Expressway, connecting Greater Noida with Agra in Uttar Pradesh, belonged to a firm, which wanted to hive it off.

A bench headed by Chief Justice posed the query to Jaypee Associates after the counsel appearing for raised objection over the proposal to hive off the 165-kilometre long expressway by the applicant firm.

The apex court was hearing a plea by Jaypee Associates seeking its permission to "hive off" the in order to generate money. The company has said it has an offer worth Rs 2,500 crore for hiving off the property.

Senior advocate Kapil Sibal, appearing for Jaypee Associates, told the bench that the company has a proposal worth Rs 2,500 crore for the property.

The counsel, appearing for the IDBI Bank, opposed Sibal's contention and claimed they cannot be permitted to hive-off the expressway as the property does not belong to the firm which has come before the court to seek its nod.

"It must also be clarified whether the property belongs to you (Jaypee Associates)," the bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, asked Sibal.

Sibal argued that the priority of the firm was the homebuyers who had booked flats in their housing projects and they wanted to help them.

He said that Rs 2,500 crore would be used to complete the projects and hand over possession of flats to the buyers.

Meanwhile, the contended that the group was earlier directed by the court to deposit money by October 27.

The bench, after hearing the brief submissions, asked Sibal to hand over copy of the proposal to Attorney General K K Venugopal and posted the matter for hearing on October 26.

The apex court had on September 11 directed Jaypee Associates, the parent company of Jaypee Infratech, to take prior approval of the court if it wished to sell any asset or property to raise funds to the tune of Rs 2,000 crore to be deposited by it in the apex court registry by October 27 to pay off the troubled home buyers.

Earlier, the had told the apex court that the company needs to raise funds to deposit Rs 2,000 crore in the apex court registry for paying the troubled home buyers.

The apex court had on September 11, while hearing a plea of home buyers of Jaypee's Wish Town project at Noida in Uttar Pradesh challenging the insolvency proceedings initiated against Jaypee Infratech, had restricted the directors of firm from leaving the country.

It had revived insolvency proceedings against Jaypee Infratech Ltd and given its management control to the Interim Resolution Professional (IRP), appointed by the National Company Law Tribunal, with immediate effect.

The top court had also asked Jaypee Infratech to hand over records to the IRP for drafting a resolution plan, indicating protection of interests of over 32,000 hassled home buyers and creditors.

The apex court while passing slew of directions had stayed any other proceedings instituted against the company for any purpose in any forum like the consumer commission, as IRP has been given control of the company's management.

The court had then said it was not concerned about the interest of company but of the hassled home buyers, who mostly belong to the lower and middle-class strata.

Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence they can get back their money only if something is left after repaying the secured and operational creditors, one of the pleas filed by some home buyers said.

Hundreds of home buyers have been left in the lurch after the National Company Law Tribunal, on August 10, admitted the IDBI Bank's plea to initiate insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526 crore loan, the plea said.

First Published: Tue, October 24 2017. 09:29 IST