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Supreme Court agrees to hear PIL on NCLT’s insolvency order against Jaypee Infratech

LiveMint logoLiveMint 23-08-2017 Priyanka Mittal

New Delhi: The Supreme Court on Wednesday agreed to hear a public interest litigation by a homebuyer seeking a stay on an August order passed by the Allahabad bench of the National Company Law Tribunal (NCLT) which initiated insolvency proceedings against Jaypee Infratech Ltd.

Jaypee Infratech Ltd is a subsidiary of Jaiprakash Associates.

Homebuyers in Jaypee Infra projects are required to fill up forms to register their claims for the corporate insolvency resolution process against the company by Thursday.

The matter was brought by Chitra Sharma, a Delhi-based resident, before a bench headed by Chief Justice J.S. Khehar who said that it would be taken up for hearing on Thursday.

“A total of 32,000 people are being affected and have been left remedy less,” said Aishwarya Sinha, lawyer for Sharma.

Under a 9 August order passed by the Allahabad bench of the NCLT, liquidation proceedings against Jaypee Infratech were initiated under the Insolvency and Bankruptcy Code of India, 2016. Jaypee Infratech has defaulted on Rs526.11 crore loan outstanding to IDBI Bank.

NCLT had appointed Anoop Jain as the Insolvency Resolution Professional (IRP) to carry out the proceedings under the Insolvency and Bankruptcy Code, while the board of directors of the company would remain suspended.

Claiming that the NCLT order had left homebuyers remedy less, it has been claimed that the August order was not only unjust, unfair, unreasonable but at the same time arbitrary and in violation of articles 14 (equality before law) and 21 (right to life and personal liberty) of the Constitution of India.

Seeking a stay on the NCLT order, the petitioner further urged the court to conduct a forensic audit of Jaypee Infra and Jaiprakash Associates to assess the extent of their bankruptcy.

As per the NCLT order, it is mandatory for homebuyers to submit forms B and C issued by the IRP which pertain to financial creditors.

It has been submitted that such an order is forcing buyers to submit themselves to the jurisdiction of the IBC, even though it does not take care of their interests.

The matter is likely to be heard on Thursday.

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