Jaypee Infra homebuyers reject resolution professional's reappointment

Buyers constitute 62 per cent of the committee of creditors for the bankrupt firm

Homebuyers, who were left in the lurch till recently, have started calling the shots in the committee of creditors (CoC) now. 

The CoC for Jaypee Infratech has rejected the reappointment of Anuj Jain as resolution professional. Homebuyers, being a major part of the CoC, have refused his appointment.

Sources close to the development said, “Homebuyers have lost faith in Jain. His focus is totally to help banks get back their loans ignoring home buyers and their claims.” 

Some homebuyers claim that in the past one year, Jain has not given possession to any of the flat buyers. This claim by homebuyers comes when sources close to the resolution professional state that 3,400 homes have been readied for possession. Homebuyers, on the other hand, argued that these houses are those that were ready even before the company went into insolvency.

Home buyers constitute 62 per cent of the CoC for the resolution of Jaypee Infratech. Even 36 per cent bankers on the committee rejected the reappointment of Jain. 

The insolvency law mandates the CoC to review the interim insolvency professional’s performance in the first one month to reappoint him as resolution professional. Based on this, the committee takes a call on whether he should continue. Jain was handling the company’s affairs for 270 days before the Supreme Court referred the case back to the National Company Law Tribunal (NCLT).

Jaypee Infratech’s case started afresh after the Supreme Court ordered fresh insolvency proceedings after hearing the plea of homebuyers. Homebuyers of the company have been opposing insolvency proceeding and liquidation. They have been insistent on getting possession of their property.

When the company had gone in for insolvency last year in May, it failed to reach a resolution. Lakshadweep’s resolution plan was rejected by the CoC. 

The former promoter of Jaypee Infratech had also presented a plan but the creditors rejected it after the introduction of Section 29 A in the Insolvency and Bankruptcy Code (IBC), debarring defaulting promoters from bidding for companies.

Last year, the insolvency regulator had allowed homebuyers to submit their claims but there was no provision in the code to consider them as a creditor. Subsequently, a committee was formed to consider amendments to the IBC. The committee had recommended making home buyers financial creditors. The government then made amendments to the IBC to this effect. 

Jaiprakash Associates, the parent company of the group, has also been taken to the NCLT under the IBC.

Knotty affair 

• IBC mandates the CoC to review RP’s performance in the first one month to reappoint him. Jaypee’s CoC did not allow continuation of Anuj Jain as RP

• Some homebuyers claim that in the past one year, Jain has not given possession of flats

• This claim comes when sources close to the resolution professional state that 3,400 homes have been readied for possession