Supreme Court Stays NCLT Proceeding against Jaypee, Relief for 3000 Home Buyers

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On Monday, the Supreme Court stayed the bankruptcy proceedings against real estate firm Jaypee Infratech at National Company Law Tribunal (NCLT), Allahabad at the request of its financier IDBI. It ruled in favour of a petition filed by home buyers. The issue has been noticed to the Finance Ministry, Jaypee Infratech, Reserve Bank of India and the Uttar Pradesh Government. Adding to it, a notice has also been sent to the Ministry of Corporate Affairs and IDBI Bank.

For evasion of a loan of about Rs 526 crore, the IDBI Bank moved to the National Company Law Tribunal (NCLT) for insolvency proceedings against Jaypee Infratech. As per the petitioners, around 32,000 home buyers, who are yet to get their flats as promised by Jaypee especially in the Delhi NCR region, suffer doubt over their investment in housing projects by the bankruptcy order. The home buyers’ plea will be heard by the apex court on October 10. The home buyers who had invested in the Jaypee’s residential projects have been put through the concoction of jammed with a number of changes that have just puzzled the matter. The most vital confusion is the forms that are available for home buyers to file their claims. The Insolvency and Bankruptcy Board of India has launched another form, adding to an earlier form.

The Allahabad bank of the NCLT, last month, passed an order commencing insolvency proceedings against Jaypee Infratech, which is a subsidiary of Jaiprakash Associates. According to the reports, the lawyer on the side of the petitioners claimed that the NCLT order has put the home buyers in a poor state as the order required them to fill up some forms, which will not let them move to the consumer courts. He also added that the home buyers are also concerned about their investments in the Jaypee’s projects. In order to evaluate the capacity of the Jaypee Infra and its holding company Jaiprakash Associates’ bankruptcy, the buyers have demanded a forensic audit.  The buyers of Jaypee’s flats were shocked by the recent developments. By introducing a new form to file claims, the Insolvency and Bankruptcy Board of India made things poorer.

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