Home buyers of Jaypee Infratech to demonstrate on June 23

The Jaypee Infratech had launched around 50,000 flats in 2009-10 in various ambitious real estate projects in Noida and along the Yamuna Expressway area. But the slow down in the property market and other factors affected the financials of the company and shattered home buyers' hopes.

The Corporate Insolvency Resolution Process (CIRP) of Jaypee Infratech Limited (JIL) has entered into the endgame of its second round.

As per the home buyers of the Jaypee Infratech, two major class of creditors included home buyers with 60 per cent vote share and banks with 40 per cent in the Committee of Creditors (CoC) are not on board in a bid to achieve successful resolution in the matter.

The buyers have alleged that the bankers were not making any effort to resolve the issues.

"It's a unique case wherein the banks have not made any genuine serious efforts in the direction of ensuring successful Resolution and the home buyers whose lifelong savings are at stake making all possible compromises and efforts so as to ensure getting possession of their dream houses with some reasonable compensation for delay," said one of flat-buyers who is serving in defence forces.

Government's Navratna Enterprise NBCC had proposed to take over the Jaypee Infratech and complete over 20,000 unfinished flats. Earlier, Suraksha Group had also shown interest to acquire the company but the flat-buyers rejected the plan.

NBCC's resolution plan was put to vote before the Committee of Creditors from May 31-June 10.

According to flat-buyers, "Most of us reposed our trust in a government Navratna Company and voted for it but the banks voted against it ostensibly under some hidden agenda.

In the past too, the home buyers had voted in favour of resolution plans submitted by other bidders but the lenders defeated those proposals by voting "NO", the distressed buyers said.

In April, the Jaypee Group's promoters had made a fresh attempt to retain control over its realty arm Jaypee Infratech by apologising to thousands of distressed home buyers and promised to infuse Rs 2,000 crore to complete pending apartments over the next four years.

Jaypee Infratech had to deliver 32,691 units, of which 4,889 units were completed before start of insolvency proceedings. As many as 7,278 more units have been completed in last 18 months, while 20,524 units are yet to be delivered.

In 2017, the National Company Law Tribunal (NCLT) admitted the application by an IDBI Bank-led consortium seeking resolution of Jaypee Infratech.

The tribunal had appointed Anuj Jain as insolvency resolution professional (IRP) to manage the company's business and invite bids from investors.

In the first round of insolvency proceedings, the Rs 7,350 crore bid of Lakshdeep, part of Suraksha group, was rejected by lenders as it was found to be substantially lower than the company's net worth and assets.

In October 2018, the IRP started a fresh initiative to revive Jaypee Infratech on the NCLT direction.

The realty firm has an outstanding debt of nearly Rs 9,800 crore.

Jaiprakash Associates Ltd (JAL) had submitted Rs 750 crore in the registry of the Supreme Court for refund to buyers and amount is lying with the NCLT. JIL is a subsidiary company of JAL.  

Image: UNI