SC stays NCLT order on Jaypee Infratech

In relief to a group of flat owners/buyers in projects of Jaypee Infratech, the Supreme Court on Monday stayed the National Company Law Tribunal's (NCLT) order appointing an insolvency resolution professional to carry out corporate insolvency proceedings on IDBI's plea seeking recovery of Rs 526 crore from the company.

Staying the August 9 order of the Allahabad bench of NCLT, a bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud told the petitioner to serve a copy of their petition on Attorney General K.K. Venugopal seeking his assistance in the matter.

The court posted the matter for next hearing on October 10.

The top court order on Monday came on a plea in public interest by a group of flat owners/buyers in the housing projects of Jaypee Infratech seeking direction that initiation of proceedings against the group under the Insolvency and Bankruptcy Code would not come in the way of exercising their rights under the Consumer Protection Act.

Most of the petitioners who have moved the top court are in the category of unsecured creditors.

It has been contended by the petitioners that if the proceedings that have been ordered by the NCLT reaches its conclusion and results in liquidation of the assets, then compared to operational and financial creditors, they would get "peanuts".

It is the interest of the secured investors that is safeguarded first in the insolvency proceedings.

There are about 32,000 buyers who have booked their homes in 27 different housing projects of Jaypee Infratech.

Thus the stay of August 9 order of the Allahabad bench of National Company Law Tribunal has come as a relief for a large number of home buyers as NCLT by its now stayed order had prohibited the institution of suits or continuation of pending suit or proceedings against the Jaypee Infratech.

The order had also barred the execution of any judgment, decree order by any court of law, tribunal, arbitration panel or other authority having any bearing on the assets of the Jaypee Infratech.

This effectively meant that aggrieved buyers of flats at the projects of Jaypee Infratech could not have moved the consumer fora for the redressal of their grievances.

--IANS

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