The Supreme Court while permitting Jaiprakash Associates (parent firm of Jaypee Infratech) to pay Rs 2,000 crore in installments, restrained its independent directors and promoters and their family members from transferring any personal assets or property without the court’s permission view to safeguarding the interests of homebuyers.
A three-judge Bench of Chief Justice Dipak Misra and Justices A.M. Kanwilkar and D.Y. Chandrachud made it clear that the promoters and directors will be held for criminal prosecution or contempt of the courts if they violated the order.
Eight independent directors and five promoters of Jaiprakash Associates were personally present in court on Wednesday as per the court’s earlier direction. When the counsel expressed inability to deposit Rs 2,000 crore in one installment, the CJI observed, “You have gone up at the cost of home buyers. We will not allow you to sell the properties.”
When counsel submitted that Rs 275 crore was being deposited in the Registry, the Bench allowed Jaiprakash Associates to furnish the due amount of Rs 2,000 crore in installments. As regards the remaining liability of Rs 1,725 crores, the Bench directed that Rs150 crore be deposited by December 14 and another Rs 125 crore by the end of December. The bench added, “Agli tareekh ko achhe bachhe ki tarah paise deposit kar dena (deposit the money like a good kid on the next date of hearing).”
At the last hearing, Jaiprakash Associate’s offer to deposit Rs 400 crore towards the due amount of Rs 2,000 crore was rejected by the court. The court asked Pawan Shree Agrawal, amicus curiae to set up a website that would help maintain a detailed account of the money owed to homebuyers and aid the refund process. The petitioners who are homebuyers of Jaypee’s Wish Town project at Noida had challenged the insolvency proceedings initiated against Jaypee Infratech.
The court while staying the Allahabad High Court order had also restricted the directors of firm from leaving the country. The apex court also revived insolvency proceedings against Jaypee Infratech and handed over its management control to the IRP, appointed by the NCLT. Flat buyers, said that under the IBC 2016, they do not fall under the category of secured creditors like banks and hence they may get back their money only if something is left after repaying secured creditors.