The Supreme Court moved on Monday to protect buyers of homes sold by builder Jaypee Infratech, which is being pursued in a bankruptcy court over unpaid loans, telling its parent Jaiprakash Associates to deposit Rs 2,000 crore ($313 million) with it by 27 October.
As many as 30,000 buyers of apartments in various projects being built by Jaypee Infratech on the outskirts of New Delhi have paid for them but have yet to take possession. They filed a petition with the court because of worries they would lose their money.
The buyers had asked the Supreme Court for protection as Jaypee Infratech is one of 12 companies being pursued by its lenders under the direction of Reserve Bank of India.
A bench of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice D.Y. Chandrachud is hearing the case.
"This is a citizenry problem, a human problem of great magnitude. IDBI can't be selfish. The homebuyers have invested their lifetime savings in these projects," Justice Misra said, according to a report in The Economic Times.
Two lawyers involved in the case said the Supreme Court had ruled the deposit was intended to ensure Jaiprakash sets aside some money to protect home buyers.
The top court further asked a court-appointed professional overseeing Jaypee Infratech to take into account the interest of home buyers, the lawyers told Reuters.
Putting the matter up for the next hearing on November 13, the bench said in case Jaypee Associates intended to sell any of its assets to raise the money, it would require prior permission from the court.
The bench also restrained the managing director and all the directors of both the companies from leaving the country.
The apex court said these would include the people who were directors when the Allahabad Bench of the National Company Law Tribunal (NCLT) had passed the order appointing the Interim Insolvency Resolution Professional on August 9.
Under India’s bankruptcy laws, a professional is appointed to run a company under bankruptcy proceedings and the rights of banks and other creditors are defined, but the fate of customers of the insolvent company is often unclear.
(With inputs from Reuters, IANS)
Updated Date: Sep 12, 2017 10:06 AM