SC stays Allahabad NCLT order declaring Jaypee as insolvent

The Supreme Court on Monday stayed the Allahabad NCLT (National Company Law Tribunal) order declaring Jaypee Infratech as insolvent.

A bench of the apex court, headed by Chief Justice of India (CJI) Dipak Misra was hearing the case.

The apex court was hearing pleas filed by home buyers, who are yet to receive possession of their flats from estate firm Jaypee Infratech.

The apex court on August 24 adjourned the hearing, giving time to other home buyers to file their petitions and join the proceedings. It also asked the petitioner to amend the petition, if need be.

The Allahabad bench of the National Company Law Tribunal (NCLT) on August 9 classified Jaypee Infratech as insolvent on the petition filed by the IDBI Bank under Section 7 of Insolvency and Bankruptcy Code 2016.

The IDBI filed an insolvency plea in the tribunal after Jaypee Infratech defaulted on a loan of around Rs. 8,500 crore. Although the company had claimed that it held adequate assets to repay the loan, the IDBI went ahead and filed the plea.

Nearly 32,000 people are affected by the NCLT order as they worry their savings given to the builder for their homes will go waste if the NCLT declares the company insolvent and begins proceedings.