SC tells Jaiprakash Associates to deposit Rs 6 bn to refund home buyers

With Jaiprakash Associates Ltd (JAL) failing to deposit Rs 10 bn, the Supreme Court on Wednesday asked the real estate firm to pay Rs 6 bn to pay back to the home buyers who have opted for a refund.

A bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud asked senior advocate F.S. Nariman, appearing for JAL, to take instruction from the company on depositing Rs 6 bn, instead of RS 10 bn, with top court's registry.

The bench said that after the amount is deposited by the JAL, it would ask the National Company Law Tribunal (NCLT) bench at Allahabad to expeditiously decide the company's plea on revival or restructuring of Jaypee Infratech Ltd (JIL), a subsidiary of holding company Jaiprakash Associates Limited.

The bench on May 16 had asked JAL to deposit Rs 10 bn, in addition to Rs 7.5 bn already deposited, with its registry by June 15, to refund the principal amount to the hassled home buyers and that on submitting the amount, the liquidation proceedings against JIL would remain stayed.

However, failure to deposit the amount would result in the start of insolvency proceedings against JIL, the bench had said.

On Wednesday, the court was informed that Rs 10 bn could not be deposited. Rs 7.5 bn has already been deposited with the top court and another Rs 6 bn would be required to pay the principal amount to home buyers, the court was told.

To this, the bench asked the JAL to "establish its bonafide by paying the money", and directed it to inform by July 13, the next date of hearing, about the company's stand on depositing Rs 6 bn with it.

JAL had sought, in apex court, a direction for restraining the NCLT bench at Allahabad from proceeding further with the insolvency proceedings.

Earlier, the bench had sought from JAL details of its housing projects in the country and said that the home buyers should either get their houses or their money back.

The court was hearing the pleas of home buyers contending that around 32,000 people had booked flats and were paying instalments, but were not left in the lurch after the NCLT, on August 10, 2017, admitted the IDBI Bank's plea to initiate insolvency proceedings against the debt-ridden company for allegedly defaulting on a Rs 5.26 bn loan.