The Centre told the Supreme Court on Thursday that it is working on a “uniform proposal” to address the grievances of homebuyers who are left in the lurch by erring realtors after having paid their hard earned money. The top court observed that it may use its plenary power under Article 142 of the Constitution to protect the interest of over 21,000 home buyers in the Jaypee Infratech case, if their grievances are not addressed.
It asked the contesting parties before the National Company Law Appellate Tribunal (NCLAT) to try to reach a common ground for arriving at a decision.
A bench of Justices A M Khanwilkar and Dinesh Maheshwari deferred the hearing for July 18, after the Centre told the court that NCLAT will hear the matter on July 17.
Additional Solicitor General Madhvi Diwan, appearing for the Centre, informed the court that hearing before the NCLAT is scheduled for July 17 and it would be better to await its outcome.
She said that the Centre is working on a uniform proposal to address various grievances of aggrieved home buyers and it will be submitted in the pending Unitech home buyers case by July 23, as per the direction of the top court in that matter.
Ms Diwan said that ministry officials have informed her that they are working on a uniform proposal which would take care of various issues of the home buyers.
The counsel appearing for the home buyers said they have an apprehension that Jaypee Infratech Ltd (JIL) may be sent for liquidation which could hamper their interest.
To this, the bench said that even if NCLAT sends the company for liquidation, the top court has enough plenary powers under Article 142 of the Constitution to protect the interest of home buyers.
The counsel then referred to the Unitech homebuyers case where the government recently indicated that it may take over the stalled projects and said that similar relief can be granted to the home buyers in Jaypee case.
To this, the bench said that any new revised or fresh proposal if made by the parties can come up before the NCLAT.
The top court had on July 9 asked the Centre to come out with a “uniform” proposal for all cases to resolve the difficulties being faced by lakhs of home buyers who have not yet got possession of flats despite paying huge amounts of money to real estate builders.
The top court, which was hearing a homebuyers matter related to JIL, said the issue concerns lakhs of flat buyers and the Centre should give a concrete proposal to resolve it.
“This issue will be bothering lakhs of home buyers. Within the IBC (Insolvency and Bankruptcy Code), we cannot do anything. But outside it, you (Centre) can suggest something. We can consider that,” the court had said.
The court’s observation had come during the hearing of a plea which has sought that JIL be not sent into liquidation, although the deadline for the corporate insolvency resolution process is over, as it would cause “irreparable loss” to thousands of homebuyers.
The top court had on August 9 last year ordered re-commencement of the resolution process against JIL and barred the firm, its holding company and promoters from participating in the fresh bidding process.
It had also allowed the Reserve Bank of India to direct banks to initiate corporate insolvency resolution proceedings (CIRP) against Jaiprakash Associates Ltd (JAL), the holding company of JIL, under the IBC.
It had said there was “no manner of doubt” that JAL and JIL lacked financial capacity and resources to complete unfinished housing projects in which over 21,000 home buyers had not been given the possession of their flats till then.
The fresh plea filed in the top court has sought a direction that an “independent and thorough forensic audit” of JIL should be conducted from the date of its incorporation.
Referring to the top court’s last year order, the plea has said, “The court had made a conscious effort to avoid liquidation of Jaypee Infratech Limited. However, the events as have unfolded subsequent to the passing of the judgment have frustrated the efforts as made by the court.”
As per top court’s direction, the 270 days for completion of CIRP have concluded on May 6, it has said.
“Till date only two serious bids have been received by the Committee of Creditors. One bid has been submitted by National Buildings Construction Corporation Limited, whereas the other has been submitted by Suraksha ARC. None of the said bids have been accepted by the Committee of Creditors till date,” the plea has said, claiming that “threat” of JIL going into liquidation is “turning into a reality with each passing day”.
It said if no resolution plan is accepted till May 6, JIL would “automatically go into liquidation”, leaving thousands of home buyers without any remedy.