'A Human Problem Of High Magnitude': Top Court Asks Jaypee To Deposit 2,000 Crores

The Supreme Court directed the managing director of real estate company Jaypee Infratech - as well as the company's parent JP Associates - not to leave the country without the top court's permission.

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'A Human Problem Of High Magnitude': Top Court Asks Jaypee To Deposit 2,000 Crores

The court also directed JP Associates to deposit Rs 2,000 crore as security on or before October 27

Highlights

  1. Jaypee homebuyers had moved court seeking protection of their interest
  2. NCLT had earlier okayed insolvency proceedings against Jaypee Infratech
  3. JP Associates to deposit Rs 2,000 crore as security by October 27
Describing the turmoil faced by flat buyers of Jaypee Infratech a "human problem of high magnitude", the Supreme Court today directed the managing director of the real estate company - as well as the company's parent JP Associates - not to leave the country without the top court's permission. The court also directed JP Associates to deposit as security Rs 2,000 crore on or before October 27 saying that the infrastructure company can sell land to pay the deposit money.

"We are interested and concerned with the home buyers who are middle class and we are not concerned with the company," the Supreme Court said. The top court had earlier stayed insolvency proceedings against Jaypee Infratech, which is into road construction and real estate business. It has constructed the Yamuna Expressway, connecting Delhi-Agra.

Hundreds of home buyers have been left in the lurch after the NCLT on August 10 admitted a plea by IDBI Bank to initiate insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526-crore loan. Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence can get back their money after repayment of dues to secured and operational creditors.

Some flat buyers then approached the Supreme Court, seeking protection of the interests of over 30,000 buyers who invested hard-earned money to book their dream homes in 27 different projects of debt-ridden realty firm Jaypee Infratech.

The Supreme Court also directed persons involved in the insolvency proceedings, except that of lenders like IDBI, ICICI Bank and SBI, not to leave the country. The Insolvency Resolution Professional has been also asked to submit a resolution plan indicating protection of interests of flat buyers and creditors within 45 days.

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