SC: Jaypee liquidation won’t solve problem

NEW DELHI: Two proposals were presented to the Supreme Court on Thursday on behalf of the interim resolution professional (IRP) in the Jaypee case which suggested the appointment of an expert committee or the reconstitution of the committee of creditors (CoC) to examine how to help homebuyers.
The suggestion was offered after the SC said liquidation of Jaypee group would not solve the problem of homebuyers and lender banks which have invested in the company and an alternative way had to be explored to end the imbroglio after the resolution plan was rejected by the CoC.
A bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud reserved its order on how to proceed in the case to protect the interest of both homebuyers and banks even as the recommendation for an independent expert committee was aired in the court.
Senior advocate Fali S Nariman, appearing for the Jaypee group, told the bench that only 8% of buyers had shown interest in getting their money back and an overwhelming 92% buyers still had confidence in the company and the group should be given a chance to complete the projects.
This view found the support of senior advocate Parag Tripathi who submitted, on behalf of the IRP, that there were two options — an expert committee or a reconstituted CoC with a representative of homebuyers — to examine the case.
“It is respectfully submitted that the proposal of IRP that first an independent person or persons may be appointed to evaluate the financial capability of JAL (Jaiprakash Associates Limited) and JIL (Jaypee Infratech Limited ) to execute the ongoing projects should be accepted and then if it is stated by an expert body that JAL/JIL do not have the financial capability, consider what future steps be taken,” Nariman said.
He said the company be allowed to go ahead with ongoing projects as 11,200 homes had already been delivered in 79 towers and construction should not be stayed midway as it would adversely affect 21,532 housebuyers yet to get possession of homes. He said the value of all JIL assets was estimated at Rs 32,882 crore.
Homebuyers who want refund of their money, however, opposed the company’s plea and told the court that they did not have confidence in the real estate developer and proceedings should be initiated against the firm as per the law.