Wednesday 24 January 2024

Details of Jaypee Infratech case in supreme court orders in favor of home buyers

The Jaypee Infratech case in the Supreme Court of India has been a long and winding journey, spanning several years and numerous hearings. Here's a detailed breakdown of the case, tracing its key milestones and highlighting the significant orders passed by the Court:

Background:

  • Jaypee Infratech Limited (JIL), a real estate developer, faced financial difficulties and defaulted on loans from banks and institutions.
  • In August 2017, IDBI Bank filed an insolvency petition against JIL under the Insolvency and Bankruptcy Code (IBC) at the National Company Law Tribunal (NCLT).
  • Homebuyers, who had invested in JIL's stalled housing projects, faced uncertainty about their investments and the completion of their homes.

Supreme Court Intervention:

  • The Supreme Court intervened in the case in September 2017, staying the NCLT proceedings and directing JIL to deposit Rs. 2,000 crore with the registry.
  • The Court subsequently appointed a committee of experts to suggest ways to revive JIL and complete the stalled projects.
  • Over the next few years, the Court heard arguments from various stakeholders, including JIL, homebuyers, banks, and government authorities.

Key Orders by the Supreme Court:

  • August 2018: The Court directed the inclusion of homebuyers in the Committee of Creditors (CoC) to ensure their voices were heard in the resolution process.
  • March 2019: The Court approved the resolution plan submitted by NBCC Ltd., a state-owned construction company, for taking over and completing JIL's unfinished projects.
  • February 2020: The Court clarified that mortgages created by JIL to secure debts of its parent company were not "financial debts" under the IBC, protecting the claims of homebuyers.
  • March 2021: The Court, finding discrepancies in the NBCC resolution plan, remanded the case back to NCLT for fresh voting and completion of the insolvency process within 45 days.
  • July 2020: The Court issued notice to homebuyers on an appeal against the NCLAT order granting conditional approval to the NBCC plan.
  • Current Status:

    • The Supreme Court continues to monitor the case and may intervene if necessary to protect the interests of homebuyers.

    Significance of the Jaypee Infratech Case:

    • The case has set important precedents for the rights of homebuyers in insolvency proceedings under the IBC.
    • It has highlighted the need for transparency and fairness in the resolution process of stressed real estate projects.
    • The Supreme Court's active involvement has provided hope and a sense of justice to thousands of homebuyers who were facing uncertainty about their investments.

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