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Liquidation of Jaypee Infratech won't help anyone: SC
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SME Times News Bureau | 20 Jul, 2018
The Supreme Court on Thursday said that the liquidation of real estate
major Jaypee Infratech will not help anyone, even as it reserved order
on a plea for protecting home buyers' interest under the bankruptcy
code.
A bench of Chiefs Justice Dipak Misra, Justice A.M.
Khanwilkar and Justice D.Y. Chandrachud echoed the view of the counsel
for the company and the Interim Resolution Professional who said that
the liquidation won't benefit anyone.
Seeking to be freed from
the proceedings under the Insolvency and Bankruptcy Code (IBC), Jaypee
Infratech asserted that it was financially viable to complete its
projects since a majority of home buyers continued to repose faith in it
despite the firm's difficulties.
Claiming that over 25,000 home
buyers have expressed confidence in the company, senior counsel Fali S.
Nariman told the court that if the entire matter is once again put back
to the IBC, it is the home buyers who will suffer.
Seeking the
setting up of a committee to examine the company's financial position
and suggest a way forward, Nariman said that any other course, including
putting the matter back to the insolvency code, would be detrimental to
the interest of the home buyers.
Urging the court to take a call
by taking recourse to Article 142 of the Constitution, senior counsel
Parag Tripathi, who appearing for the Interim Resolution Professional,
said that the way forward should not be litigation or liquidation which
is a long-drawn affair.
However, Additional Solicitor General
Tushar Mehta resisted the suggestion that the top court take recourse to
Article 142 to decide on the further course of action after attempts to
find a resolution plan under the bankruptcy code did not fructify.
Telling
the court that the recourse to Article 142 can be taken only in the
area not occupied by existing law, Mehta expressed misgivings as to
whether such a course would not amount to parallel proceedings.
He
said that fresh proposals be invited and Committee of Creditors (CoC),
having representatives of home buyers, in its collective wisdom decide
which resolution plan was the best.
Initially, the lending banks
and the financial institutions having a status of secured creditors were
part of the CoC but an amendment had facilitated inclusion of the home
buyers as well.
The resolution proceedings under the IBC have
come to an end after the committee of creditor comprising 32 banks could
not find anyone to step in to replace Jaypee Infratech, which is facing
insolvency proceedings at the instance of IDBI.
The Allahabad
bench of the National Company Law Tribunal had on August 9, 2017,
appointed the Interim Resolution Professional on an IDBI plea for the
recovery of Rs 526 crore from Jaypee Infratech.
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