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Supreme Court stays NCLT’s order on insolvency proceedings against Jaypee Infra

LiveMint logoLiveMint 04-09-2017 Priyanka Mittal

New Delhi: The Supreme Court on Monday stayed 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.

A bench headed by chief justice Dipak Misra was hearing a public interest litigation by a homebuyer and Delhi-based resident Chitra Sharma, seeking stay on the NCLT order. Homebuyers in Jaypee Infratech projects are required to fill up forms to register their claims for the corporate insolvency resolution process against the company by 31 August.

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

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 Anuj 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.

It has been claimed that the NCLT order had left homebuyers remedy less, and 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.

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