Jaypee Infratech’s Homebuyers Plead to IRP to protect their Interest

A group of homebuyers of Jaypee Infratech, which has recently absorbed shock of bankruptcy, has written to Anuj Jain, IRP, to protect the interests of thousands of other home buyers who booked their living spaces in their Noida-based project, Jaypee Wishtown, while finalizing the plan for resolution. Home buyers have doubted the criteria, which is adopted to evaluate different bidders who are focused in resolution of debts by Jaypee Infratech. It is highly skewed and arbitrary for financial creditors.

The crisis-led Jaypee Group firm is suffering insolvency when it was found default on loan repayments. Last year, the National Company Law Tribunal admitted application by a consortium by IDBI Bank, has been looking for resolution under Insolvency & Bankruptcy Code for Jaypee Infratech. Anuj Jain has been appointed by NCLT as Interim Resolution Professional (IRP) who
will manage the business. Lakshadweep has owned Jaypee Infratech with the bid of Rs. 7,350 Cr, which will be the Committee of Creditors in its meeting which is scheduled on May 7.

The letter added, “Home buyers have paid around Rs. 14000 Crore according to the records as against the exposure of financial creditors of over Rs. 9,800 Cr. only. The home buyers’ stake is 1.4 times higher than financial creditors’ stake in the company.” But there is 1.6 times higher weightage for creditors as compared to customers. The home buyers’ group added, “We have submitted that the finalization of a bid is neither permissible nor correct on such objectionable criteria of evaluation as per the Supreme Court orders.”

The group also said that Supreme Court also wants to protect the interest of home buyers. Without naming the bidding firm, the home buyers added that the applicant asked for compensation waiver to the customers for such delays to be in possession, irrespective of the agreed terms in allotment. According to the sources, a joint venture between Mumbai-based Dosti Realty and
Suraksha Asset Reconstruction company led by Sudhir Valia, Lakshadweep Pvt. Ltd has sent the offer of Rs. 1200 Cr in cash, land parcel of Rs. 4000 Cr. and the rest as non-convertible, long-term debentures in auction of insolvency. A small stake of equity to the lenders is also the part of offer.

Jaypee Infratech has been focused to develop over 32000 flats in Greater Noida and Noida and it has delivered up to 9500 apartments so far. It has applied for occupancy to offer 4500 flats for possession. The infrastructure and real estate developer will deliver the rest of 18000 flats by the year 2021. To develop these flats, it will require Rs. 6500 Cr, when it is yet to receive Rs. 4000 Cr. from homebuyers, with Rs. 2500 Cr. worth of shortfall.

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