Jaypee homebuyers disappointed as SC directs Suraksha Realty and NBCC to submit revised bid

Close to 20,000 homebuyers in the bankrupt realty developer Jaypee Infratech’s residential projects in Noida and Greater Noida left disappointed on Wednesday after the Supreme Court ordered Suraksha Realty and NBCC to submit modified/fresh resolution plans, to take over the projects. Jaypee Infratech went into the insolvency process in August 2017.
On December 18, 2019, its Committee of Creditors (CoC) selected NBCC as the winner to acquire the company with 97.36% of the votes. The other contender was Suraksha Realty. In March 2020, the National Company Law Tribunal (NCLT) approved a proposal of state-run NBCC (India) to acquire bankrupt realty developer Jaypee Infratech.

“This is like playing with the emotions of homebuyers. A year after we were given hope that NBCC will complete the project, we are back to square one. Many of us waiting for a decade with the dual burden of EMI and rent and this decision has extended our pain,” said Rajeev Verma, a Jaypee wish town homebuyer. In the first round of insolvency proceedings conducted last year, a Rs 7,350 crore bid from Lakshadweep, part of the Suraksha Group, was rejected by lenders. They rejected the bids of Suraksha Realty and NBCC in the second round held in May-June 2019.

“Taking all the facts and circumstances into account and in keeping with the spirit and purport of the orders passed in the past, we are inclined to again exercise the powers under Article 142 of the Constitution of India and to enlarge the time for completion of CIRP concerning JIL while extending the opportunity to the said resolution applicants Suraksha Realty and NBCC to submit modified/fresh resolution plans, which are compliant with the requirements of the Code and the CIRP Regulations and are in accord with the observations and findings in this judgment,” Supreme Court said in its order on Wednesday.

The SC has directed the IRP to complete the CIRP within the extended time of 45 days. For this purpose, it will be open to the IRP to invite modified/fresh resolution plans only from Suraksha Realty and NBCC respectively, giving them time to submit the same within 2 weeks from the date of the judgment.

The SC has made clear that the IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum. The said resolution applicants shall be expected to proceed on the basis of the information memorandum already issued by IRP and shall also take into account the facts noticed and findings recorded in this judgment

“It is frustrating and a waste of time and money. What wrong have homebuyers done in buying this property? We have had enough rounds of voting. Let our money siphoned off by the promoter be returned to us and allow homebuyers to complete the project,” said Sanjeev Sahani, a homebuyer who has been waiting for possession of his unit he booked with Jaypee Infratech almost a decade ago. Jaypee had defaulted on a Rs 526-crore loan by the bank. Its total debt was R 9,800 crore to IDBI Bank-led consortium.