Two years battle under IBC, Jaypee homebuyers yet to find conclusion
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Two years battle under IBC, Jaypee homebuyers yet to find conclusion

Homebuyers may have to bear another financial burden to meet the enhanced compensation to farmers. 

Two years battle under IBC, Jaypee homebuyers yet to find conclusion

Much of developments have taken place ever since Jaypee Infratech went into insolvency in August 2017 after the National Company Law Tribunal (NCLT) accepted IDBI Banks’ plea, close to 25,000 homebuyers are clueless about their flats and are forced to move from one judicial proceeding to another. 

Buyers said having got no concrete action from any sides in the last two years, they have left with no choice except waiting and going through the developments in and out.  In a span of two years, as many as four resolution processes were initiated under the Insolvency and Bankruptcy Code (IBC)- 2016, however, either resolutions plans were rejected by the committee of creditors or could not pass on technical grounds.

The first resolution plan to take over debt-ridden Jaypee Infratech was submitted by the Surakhsha group, which was rejected. It was followed by the second round of resolution process, again initiated by the Surakhsha group, under which it submitted a resolution plan, which, however, was rejected by banks.

Then argued that the National Building Construction Company (NBCC), a government-owned real estate firm, should take over the stalled Jaypee Infratech projects. The NBCC submitted its resolution plan accordingly as homebuyers preferred a government-run firm. However, the resolution process was stopped on halfway proceeding. Homebuyers voted in favour of NBCC, but their voting percentage was not reached up to the required 66 percent.

Failure to which, a fourth-round resolution process was started and NBCC submitted a resolution plan with certain conditions, but the resolution plan was rejected again. “Having an experience of the last two years' developments, all I have to say that nothing has come out so far to provide relief to homebuyers. We moved pillar the post and frankly speaking, many have lost their hopes to get their flats. We did enough on our part to maximise the voting percentage of buyers through call centers, messages and some other way but many those who live out side Delhi-NCR or many who are senior citizen were unable to reach during voting,” said Ajay Kaul, a homebuyer.

After the failure of the fourth term of resolution process on given 270 days under the IBC Act, a fear of liquidation prompted homebuyers to knock the door of the Supreme Court for seeking its intervention on the matter. Homebuyers felt relief at some extent after the Apex Court directed National Company Law Appellate Tribunal (NCLAT) not to sent Jaypee Infratech into liquidation, instead find another way to resolve the matter.

Following the top court's directive, NCLAT on July 30 extended additional 90 days permitting for fresh bids, which includes a 45 days window Resolution Professional (RP) and lenders of the debt-ridden firm (Jaypee Infratech) to invite fresh bids and for all litigation process.

However, as CitySpidey has learned through its sources, no fresh bids have been submitted neither by NBCC which was supposed to do, nor any other real estate firm so far.

In a fresh development, the Supreme Court on Tuesday extended status quo for two weeks on the insolvency proceeding on a plea challenging NCLAT’s July 30 order. The top court stated that the new resolution plans have be invited in accordance with the new amendments in the IBC Act, as the court was informed that the Parliament has passed the amendments in IBC, which would address various concerns of homebuyers.

What another worry likely to knock the doors of homebuyers is reported that they have to bear another financial burden to meet the enhanced compensation to farmers. Reports suggested that the Uttar Pradesh government was yet provided clarity on additional to displaced farmers, which is close to Rs 1,700 crore and a burden that may have to be borne by the homebuyers and banks.

“However, it is not clear so far that homebuyers will have to bear extra financial burden to pay additional compensation to the homebuyers, but if it happens the buyers would accept it. We paid our hard-earned money and waiting for flats for nearly a decade. No compensation or relief was given to homebuyers and again will be forced to pay more?” said another homebuyer of Jaypee Infratech group.

Sources said in a meeting held recently, the Centre was of the view that the burden (farmers’ additional compensation) should be borne by the homebuyers as well as the banks.