Real estate firms are not having a good time as some companies continue to face legal trouble. The Supreme Court has asked Jaiprakash Associates to deposit Rs.100 Crores with its registry before May 10. The company has already paid Rs.100 crore last Thursday in accordance with the earlier order of the court. Earlier, Unitech also faced a similar situation when it was asked to deposit about Rs.750 crore with its registry.
The Supreme Court bench was headed by none other than the chief justice of India, Dipak Misra. The bench also directed the Insolvency Resolution Professional (IRP) to think about the representation of revival plans submitted by Jaiprakash Associates as per law. The company wanted to impress the court with its revival plan and indicated that it was able to complete 500 houses per month.
On March 21, the court had asked the realty firm to deposit Rs.200 crore in two installments with its registry. This was meant to pay back homebuyers, who have preferred to seek refund rather than getting ownership of flats. Following the latest deposit, the company indicated it had deposited Rs.550 crore with the court’s registry until now. The firm wanted excess amount from the court citing that only eight percent of the more than 30,000 buyers preferred to go in for a refund. That leaves the remaining 92 percent to satisfy with the delivery of flats; the Hindu reported quoting PTI.
The Supreme Court has made sure that it protects the interests of investors or homebuyers. This was quite evident in a number of rulings like the famous Sahara in which its chairman, Subrata Roy, had to face the arrest and remained in custody until he was granted bail. Similarly, Unitech had to face the court’s ire when it was asked to deposit Rs.750 Crores earlier this year.
The court also wanted Jaypee Infratech Ltd, a subsidiary of Jaiprakash Associates, to come up with the details of its housing projects in India. The court was categorical that homebuyers should get either their money back or their houses. The court also refused to grant permission for an urgent hearing on Reserve Bank of India plea that sought its approval to start insolvency proceedings against the company in National Company Law Tribunal. The court stated that it could deal with the matter at a later stage and not immediately.
Homebuyers Left In the Lurch
Homebuyers were not satisfied with the company on the delivery of flats as promised. This included Chitra Sharma, who had to move the Supreme Court for relief. The plaintiffs’ contended that about 32,000 people have booked flats and that there was no hint of delivery. She also pointed out that hundreds of homebuyers were only paying installments.
As if adding oil to the fire, the NCLT admitted the IDBI Bank’s appeal to start insolvency proceedings on August 10 last year leaving the homebuyers in the lurch. The public sector bank pointed out that the company has defaulted Rs.526 crore loan.