Jaypee Associates has been directed by the Supreme Court to deposit Rs100 crore by May 10, 2018. The next hearing of the case is scheduled on May 11, 2018. As per the direction of the Court, the company has already deposited Rs 100 crore. The Supreme Court has been hearing the case related to delayed possession of flats by Jaypee Associates. Due to huge debt on its book and its inability to repay loans, the developer has been going through insolvency proceedings under National Company Law Tribunal .
On March 21, the apex court asked the company to deposit Rs200 crore in two instalments. The group company has deposited a total of Rs 650 crore in the Supreme Court.
NCLT initiated bankruptcy proceedings against Jaypee Infratech last year. NCLT has appointed Anuj Jain, a chartered accountant, to prepare a resolution plan for the company. The resolution process has to be completed within 180 days, which can later be exceeded by 90 days.The plan needs to have approval of 75 per cent financial creditors in the committee.
Jaypee Infratech defaulted the payment of Rs 526 crore to IDBI bank, which later initated proceedings against Jaypee Infratech. The company was included in the first list by The Reserve Bank of India (RBI) where 12 large companies were referred for proceedings under IBC.
Initially, there was no clarity about the rights of homebuyers if the company goes into liquidation. Homebuyers were considered to have third party rights as banks have given loans to builders for construction of buildings. Recently, it has been made clear that homebuyers rights will not be considered as third party rights but will be categorised as financial creditors. Being financial creditor means that in the case of liquidation of a company, financial creditors will be third in the line to get their share after meeting the cost of resolution and workers’ dues.