Jaypee Infratech's stalled Wish Town leaves homebuyers in the lurch

This report has been updated

A final resolution between Yamuna Expressway Industrial Development Authority (Yeida) and Mumbai-based Suraksha Group to settle issues related to farmer compensation to complete stuck realty projects of bankrupt Jaypee Infratech in Noida may get delayed.

The development comes after the National Company Law Appellate Tribunal (NCLAT) had said that the homebuyer’s appeal will be heard on merits and a judgment passed if both bodies do not reach an amicable settlement by April 18.
 

“While both bodies are on the right path as far as a settlement is concerned, meeting the April 18 deadline woulddepend on getting Cabinet approval,” a source close to the development said.
 

Yeida in September 2023 had approved Suraksha Group’s initial resolution plan to complete stuck realty projects of bankrupt Jaypee Infratech in Noida and Greater Noida, with a caveat that the realtor will have to pay additional compensation of about 64.7 per cent towards land compensation to farmers. The plan is currently stuck with the Uttar Pradesh (UP) government, awaiting Cabinet nod. Suraksha Group has also submitted a revised resolution plan, which is still under consideration with Yeida.
 

“The proposal for an out-of-court settlement between Yeida and Suraksha has been pending since July 2023. More than nine months have passed but no settlement has been arrived at,” says an application filed by homebuyers to the appellate body.

 

Homebuyers may be forced to approach apex court
 

Addressing construction delays, Sanjeev Sahani, a petitioner in the case, said that more than 20,000 families are suffering for want of justice and waiting impatiently for the keys to their dream homes for over a decade.
 

Altogether, nine projects have 97 towers where construction has been suspended for almost a decade, affecting 20,000 homebuyers. This comes as the NCLAT in its last hearing ordered that Suraksha Group, whose acquisition bid for Jaypee Infratech was approved by the National Company Law Tribunal (NCLT) last year, can start construction on these nine projects.
 

“NCLAT should pass the order by the next hearing. It should not give more time to the authorities or the government to decide on this. Homebuyers have waited long enough,” Sahani said.
 

Another concern is the delay due to the election model code of conduct being enforced, which can further delay the decision by the UP government.
 

“Homebuyers have no option but to approach the Supreme Court to direct the contractor Jaiprakash Associates to hand over the site, drawings etc and allow appointment of new contractors so that construction could be restarted after 10 years of wait,” Sahani added.

Efforts on to start prelim work for construction
 

The NCLT-appointed implementation and monitoring committee had shot off a letter to Jaypee’s holding company Jaiprakash Associates last month, seeking possession of 97 towers at these nine projects immediately to explore steps to accelerate construction work during the pendency of appeals before NCLAT and the SC.
 

It is learnt that Jaiprakash Associates has refused to hand over site possession, good-for-construction and service drawings and sanctions from authorities, not allowing the implementation and monitoring committee to restart the stalled construction of 97 towers.
 

“The implementation and monitoring committee has decided to descope the work concerning the construction of 97 stalled towers of Jaypee Wish Town, Noida, which have been at a standstill for more than eight to 10 years,” the letter dated March 11 said. The implementation and monitoring committee also urged Jaiprakash Associates to extend “unconditional cooperation” and access to construction sites to the new contractors after they are hired.
 

The nine projects are the ones where construction could begin, but it will only happen in phases as Suraksha hasn’t taken complete charge of Jaypee Infratech and cash flow is limited.
 

“In the interest of thousands of homebuyers, the implementation and monitoring committee has decided to award fresh contracts to other contractors for these towers, rather than on a bilateral basis to Jaiprakash Associates,” the letter added.
 

The implementation and monitoring committee, which includes Suraksha Group’s managing director, a former interim resolution professional, homebuyers, and lenders, handles the day-to-day operations of Jaypee Infratech. It will continue to work on hiring contractors for construction at Wish Town until Suraksha takes over the reins of Jaypee Infratech.
 

“Although Suraksha was allowed to take over Jaypee Infratech’s stalled projects last year in March, it will formally take charge after all the litigations against its acquisition conclude,” a source close to the development said.

In limbo
 

 Homebuyer’s appeal to be heard by NCLAT if the two bodies do not reach settlement by April 18
 

 Yeida in September 2023 had approved Suraksha Group’s initial resolution plan 
 

 The plan had a caveat that the realtor will have to pay additional compensation of 64.7% to farmers
 

 The plan is currently stuck with the UP govt, awaiting Cabinet nod
 

 Meeting the April 18 deadline would depend on getting Cabinet approval, said a source