Supreme Court to hear PIL filed by homebuyers of Jaypee tomorrow

The Apex Court has agreed to hear a public interest litigation filed by homebuyers who have purchased their dream homes in Jaypee Infratech. Homebuyers are seeking a stay on the order passed by Allahabad Bench of the National Company Law Tribunal which initiated insolvency proceedings against Jaypee Infratech Ltd.

Chitra Sharma, a Delhi based resident filed a PIL before a bench headed by Chief Justice J.S. Khehar.

Chief Justice J.S Khehar and Justice D Y Chandrachud has agreed to hear the plea of aggrieved home buyers who claim that they will neither get a home or refund of their hard earned money on account of being unsecured creditor.

Jaypee Infratech is the subsidiary of Jaiprakash Associates who is into real estate projects and construction business. Jaypee has constructed massive Wish Town Apartments in Noida and Yamuna Expressway, connecting Delhi-Agra among others.

Jaypee Infratech has defaulted on 526.11 crore loan outstanding to IDBI Bank and hence the bank filed an application before NCLT to initiate insolvency proceedings against it. On August 9, NCLT declared Jaypee Infratech insolvent.

Homebuyers in Jaypee Infratech are required to fill up forms to register their claims for the corporate insolvency proceeding against the company by Thursday.

This order of NCLT has left 32,000 homebuyers remedy less.

Petitioners claim that the order of NCLT is arbitrary, unfair, unjust and unreasonable. It is in violation of Article 14 (Equality before law) and 21 (right to life and personal liberty) of the Constitution of India.

The petitioner is seeking a stay on NCLT order and urged the court to conduct forensic audit of Jaypee Infra and Jaiprakash Associates to assess the extent of their bankruptcy.

The NCLT order is forcing buyers to submit homebuyers to the jurisdiction of the IBC even though it does not take care of their interest.

As per the Insolvency and the Bankruptcy Code, the interest of the secured creditors will be protected first in the insolvency proceedings and flat buyers being unsecured creditors are left in a lurch.

Further, the decree and orders that have been passed by the consumer courts and civil courts in the favour of homebuyers cannot be executed due to the pendency of insolvency proceeding.