Noida: SC asks Jaypee to deposit Rs 2,000 crore in the interest of homebuyers
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Noida: SC asks Jaypee to deposit Rs 2,000 crore in the interest of homebuyers

The apex court has also said that in order to sell any assets, Jaiprakash Associates will require its permission.

Noida: SC asks Jaypee to deposit Rs 2,000 crore in the interest of homebuyers Picture used for representational purposes

Today the Apex Court of the country has directed an insolvency resolution professional to take charge of the management of Jaypee and formulate an interim resolution plan. This plan needs to be submitted before the court within 45 days and shall include all the necessary provisions to protect the interests of home buyers.

Today Advocate Ajit Sinha, had argued before a bench headed by Chief Justice Dipak Mishra that these home buyers (of Jaypee) essentially hail from the lower and middle income groups. Therefore going by this fact, they have all invested their savings of a lifetime with Jaypee Infratech and its holding company, Jaiprakash Associates. Hence, it was urged that in this scenario the developer has to protect the interests of the homebuyers.  

The court has ordered Jaiprakash Associates, which is not party to the insolvency proceedings, to deposit a sum of Rs 2000 crores before the Apex Court on or before October 27 with a view to protect the interests of home buyers. Further the court stated that for any asset of the company to be sold, prior approval (of the court) will have to be obtained.

The court also said that the managing director and other directors of these companies will need its permission before leaving the country. The court was urged to appoint a representative of home buyers in the creditor committee.

Earlier this month, the court had put a stay over the insolvency proceeding as it was challenged by ten associations of home buyers who had stated that their interests were not protected under the present insolvency and bankruptcy code specifically because they fall under the category of unsecured creditor. The Apex Court has now modified the earlier order and shall appoint a home buyer representative to attend the creditor committee meeting.