industry

Jaypee Infra homebuyers concerned over extension-led delay in resolution


Homebuyers in realty developer ‘s projects have raised their concerns over likely delay in the insolvency resolution process of the debt-stressed company following ’s insistence on considering their bid for voting and Suraksha Group’s objection to ratify the state-run company’s ‘non-compliant’ plan.

Homebuyers’ associations have approached the insolvency resolution professional with their demand to adhere to the timelines without offering any further extensions and avoid litigations to ensure the resolution is successfully completed this time.

Suraksha, in a legal notice to IRP and Committee of Creditors (CoC) on Sunday, said that NBCC’s plan was submitted after the stipulated timeline and after opening and circulating the former’s plan to CoC members.

“Suraksha has cautioned the IRP and CoC members that it will withdraw from the process and not submit its plan again owing to unfair process and favouritism if the CoC allows NBCC back-door entry and reopens the process,” said a person familiar with the development.

NBCC’s final bid was rejected by the CoC on Thursday as non-compliant. On Saturday, NBCC wrote to the resolution professional suggesting that the company’s plan be considered for voting that is expected to start from Monday.

Following NBCC’s submission of addendum, the IRP is now planning to hold a CoC meeting on Monday.

Homebuyers hold a total 57% voting rights in the process. They have requested the IRP and CoC to include the NBCC bid only if it complies with IBC code and the Supreme Court order.

“NBCC has failed to follow submission timelines given by the CoC every time and has failed to submit a compliant bid (which is more important as per IBC code and Supreme Court final order). We fear that they will still not keep up their commitments with homebuyers also,” said Sanjeev Sahani, a team member of 9 Jaypee Infratech homebuyers’ association.

According to his letter to the IRP and CoC, homebuyers do not want any further litigation as they have been suffering for over the last 8 to 10 years and have another four years of struggle before receiving possession of their homes.

NBCC has always mentioned in meeting with homebuyers that their proposal will be debt-free, whereas now they have proposed to raise Rs 2,000 crore debt, he said.

Homebuyers have also shared the legal opinion of former Supreme Court judge B S Chauhan, as sought by them, with the CoC and IRP. According to Justice Chouhan’s opinion, the IRP and CoC cannot allow submission of addendum by NBCC after the expiry of time stipulated for the same. However, even if it is accepted, it cannot be termed as compliant as per the Insolvency & Bankruptcy Code (IBC) and the Supreme Court judgment.

“The issuance of NCDs by NBCC to dissenting financial creditors is not allowed as per the Supreme Court judgment. Compliant plan needs to be put to vote so that we avoid any further delay and litigation. As homebuyers, we are interested in seeing this CIRP (Corporate Insolvency Resolution Process) getting over and the construction be started and we curtail losses of rent payment and EMIs,” said Jayashree Swaminathan, a homebuyer who had sought the legal opinion from Justice Chauhan.

In an addendum filed on Saturday morning, NBCC has claimed to have addressed the reservations raised by the CoC members.

“Some public sector banks are trying to push the NBCC plan submitted after the timelines. This is likely to result in litigations, which will work against homebuyers’ interest of faster delivery of our already stuck homes,” said one of the homebuyers.

Suraksha has proposed to offer Rs 6,984 crore to lenders, while NBCC had offered Rs 5,248 crore to them, showed a fair market valuation report. Suraksha has also offered land worth Rs 400 crore to homebuyers for the past delays. Both proposed to complete the stuck projects in 42 months.

Around 20,000 home buyers have been waiting to get delivery of their homes after the Allahabad bench of the NCLT classified Jaypee Infratech as insolvent on a petition filed by IDBI Bank under Section 7 of IBC. Jaypee had defaulted on Rs 526-crore loan by the bank.

In 2017, the NCLT had admitted the application of an IDBI Bank-led consortium seeking resolution of Jaypee Infratech’s debt under the IBC. Jaypee Infratech has a debt obligation of over Rs 9,800 crores to the IDBI Bank-led consortium. Homebuyers’ claims amount to Rs 12,714 crore. The admitted financial debt out of the total claims filed by the creditors is Rs 22,613 crore.



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