Will Jaypee buyers find viable solution in third attempt of IBC proceedings?
Will Jaypee buyers find viable solution in third attempt of IBC proceedings?
Praveen Dwivedi
Will Jaypee buyers find viable solution in third attempt of IBC proceedings?
Photo: Samrat Roy

Will Jaypee buyers find viable solution in third attempt of IBC proceedings?

Noida: Following the directions of the Supreme Court, state-owned National Buildings Construction Corporation (NBCC) and Suraksha Realty have submitted their resolution proposals to acquire debt-ridden Jaypee Infratech housing projects which are reeling under Insolvency and Bankruptcy Code (IBC).

The resolution proposals will further go into process after the Committee of Creditors (CoC), which includes homebuyers and lenders, will review it taking into account conditions put forward by the bidders.

CitySpidey was told that CoC is scheduled to held its first meeting on Monday under the supervision of appointed Interim Resolution Professional (IRP) Anuj Jain. 

Meanwhile, majority of the homebuyers are wondering whether they would find a viable solution in third attempt of IBC proceedings in last two years.

If the CoC approves or agrees with proposals of two bidders (NBCC and Suraksha Reality), in further process, e-voting of homebuyers’ representative, banks, ex-board members and other stake holders will be conducted. 

During the meeting, homebuyers' representative is likely to demand for submission of forensic audit report and delay penalty to compensate homebuyers for long years of delay.

Jaypee Infratech homebuyers talking to CitySpidey opined that the CoC meeting should be conclusive, instead of giving more confusions to the homebuyers. Homebuyers held banks and other lenders responsible for differing with homebuyers' views to protect their interest in all the three previous insolvency proceedings happened in last two years.

“On previous occasions, each one of them looked at their own interest instead of homebuyers. As a homebuyer, this time again I would hope for a final resolution and timely construction of our flats,” said, Ajay Kaul, one of the homebuyers.

He added, “Having an experience of following the developments in last two years, all I have to say is that nothing has come out so far to provide relief to homebuyers. We moved from pillar to post and frankly speaking, many of us have lost their hopes to get flats. This time, we are again hoping that things would be resolved and a final decision would come out.”

Buyers said that they are left with no choice except for waiting and going through the developments in details. In a span of two years, as many as four resolution processes were initiated under the Insolvency and Bankruptcy Code (IBC), 2016, however, all the resolution plans were rejected by the CoC or could not be passed on technical grounds.

However, amid the fresh round of resolution process, homebuyers are somewhere little worried about voting percentage issue and deciding whom to vote. Buyers have nearly 60 per cent votes and the rest lies with the bankers. For the bid to be approved, 66 per cent voters should be in favour of the deal.

Sources privy with the development told that NBCC has offered 1,426 acres of land of worth Rs 5,000 crore to financial creditors as against 950 acres in its earlier bid which was rejected by the CoC in June this year.

NBCC has also promised to deliver flats to nearly 23,000 distressed homebuyers over the next four years and will pay a penalty of Rs 5 per sqft per month for every delay. The company has offered 75 per cent of the 858 acre of land parcel to bankers for Rs 1,000 crore.

Jaypee Infratech has about 3,000 flats which have no claimants and NBCC is ready to offer 50 per cent of these units to bankers. These flats are estimated to be worth Rs 2,500 crore. NBCC has also taken the responsibility for selling Rs 1,750 crore worth of unsold flats of Jaypee Infratech instead of offering them to lenders as proposed earlier.

After the failure of the fourth term of resolution process in given 270 days under the IBC Act, a fear of liquidation prompted homebuyers to knock the doors of the Supreme Court for seeking its intervention in the matter. 

Homebuyers felt relief at some extent after the apex court directed National Company Law Appellate Tribunal (NCLAT) not to send Jaypee Infratech into liquidation. Instead, find another round to resolve the matter. Jaypee Infratech went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) accepted IDBI Banks’ plea and since then, homebuyers are in the lurch.
 

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