Jaypee has been asked to deposit Rs 2,000 crore by October 27 with the Supreme Court so that flat-owners can be refunded.
The court was hearing a plea by over 40 home buyers of Jaypee Wish Town project at Noida in Uttar Pradesh who have challenged certain provisions of the Insolvency and Bankruptcy Code, 2016.
The story so far -
The Supreme Court had on September 11 revived insolvency proceedings against Jaypee Infratech Ltd and given its management control to the Interim Resolution Professional (IRP), appointed by the National Company Law Tribunal, with immediate effect.
It had restrained the managing director and directors of the company from travelling abroad without permission and asked its parent company, Jaypee Associates, to deposit Rs 2,000 crore with the registry to safeguard the interest of the home buyers.
How Jaypee Group shattered dream of thousands of middle-class, young buyers
The six-lane Yamuna Expressway, which links Delhi to Agra, was built by Jaypee in 2012 for a cost of 13,000 crores. The Jaypee Group was given land in lieu of constructing the Yamuna Expressway project between Greater Noida and Agra.
Jaypee Infratech Private Limited had in 2013 launched a luxurious studio apartment project under the name ‘Buddh Circuit Studios’. It was proposed next to the Formula One circuit, the first and only one in India. The builder had promised that each apartment owner would have excess to the club, sports facilities and Formula One track and the apartments would be delivered in 2014-15.
From the mid-2000s onwards, lakhs of middle-class Indians, eager to own their own homes, poured cash into new building projects on the outskirts of major cities as a property boom took hold.
Thousands of buyers now panic-stricken
In 2016, Jaypee scrapped the project, spelling trouble for around 3,000 buyers.
Now, panic-stricken buyers are running pillar to post for clarity. They are demanding a refund of their investment.
Jaypee buyers have expressed fear that despite filling forms to claim their dues in the resolution process, they could be wronged if their interests are not adequately protected during insolvency resolution. Over 32,000 buyers of Wish Town have been affected by the insolvency bid raised against the builder at NCLT.
In a letter to the amicus curiae representing buyers, in the insolvency proceedings of Jaypee Wish Town at the National Company Law Tribunal (NCLT), the buyers have demanded that the builder should submit Rs 15,000 crore in the Supreme Court to ensure the project's completion. The buyers, in a letter submitted to the amicus curiae, have demanded that all flats be completed and handed over by December 2018. ALSO READ: Homebuyers ready to bombard Jaypee Infratech with 4,000 lawsuits
YEIDA cancels 17 housing projects along Yamuna Expressway
To make matters worse, the Yamuna Expressway Industrial Development Authority (YEIDA), which handles the real estate
and infrastructure development along the Yamuna Expressway, in April, cancelled the building plans of 17 housing projects, after it emerged that the plans for these projects were lacking in safety parameters like fire safety and sewage management.
Out of the 17 projects, 7 belong to Jaypee Infratech. Other builders whose projects have been cancelled include Ajnara, Oriss, Urbania and Jaypee Sports International (JPSI).