New Delhi, July 19 (IANS) The Supreme Court on Thursday said that the liquidation of real estate major Jaypee Infratech will not help anyone, even as it reserved order on a plea for protecting home buyers’ interest under the bankruptcy code.
A bench of Chiefs Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud echoed the view of the counsel for the company and the Interim Resolution Professional who said that the liquidation won’t benefit anyone.
Seeking to be freed from the proceedings under the Insolvency and Bankruptcy Code (IBC), Jaypee Infratech asserted that it was financially viable to complete its projects since a majority of home buyers continued to repose faith in it despite the firm’s difficulties.
Claiming that over 25,000 home buyers have expressed confidence in the company, senior counsel Fali S. Nariman told the court that if the entire matter is once again put back to the IBC, it is the home buyers who will suffer.
Seeking the setting up of a committee to examine the company’s financial position and suggest a way forward, Nariman said that any other course, including putting the matter back to the insolvency code, would be detrimental to the interest of the home buyers.
Urging the court to take a call by taking recourse to Article 142 of the Constitution, senior counsel Parag Tripathi, who appearing for the Interim Resolution Professional, said that the way forward should not be litigation or liquidation which is a long-drawn affair.
However, Additional Solicitor General Tushar Mehta resisted the suggestion that the top court take recourse to Article 142 to decide on the further course of action after attempts to find a resolution plan under the bankruptcy code did not fructify.
Telling the court that the recourse to Article 142 can be taken only in the area not occupied by existing law, Mehta expressed misgivings as to whether such a course would not amount to parallel proceedings.
He said that fresh proposals be invited and Committee of Creditors (CoC), having representatives of home buyers, in its collective wisdom decide which resolution plan was the best.
Initially, the lending banks and the financial institutions having a status of secured creditors were part of the CoC but an amendment had facilitated inclusion of the home buyers as well.
The resolution proceedings under the IBC have come to an end after the committee of creditor comprising 32 banks could not find anyone to step in to replace Jaypee Infratech, which is facing insolvency proceedings at the instance of IDBI.
The Allahabad bench of the National Company Law Tribunal had on August 9, 2017, appointed the Interim Resolution Professional on an IDBI plea for the recovery of Rs 526 crore from Jaypee Infratech.