When real estate company Jaypee Infratech Limited (JIL) went for a Company Insolvency Resolution Plan (CIRP) on August 9, 2017, approximately 30,000 homebuyers hoped to realise their dream of owning a flat. Little did they know that the inordinate delay in completing the CIRP process would only end up adding insult to their injury. Worse, instead of addressing their concern in a time-bound manner, it would lead to more uncertainty and frustration.
According to the Insolvency and Bankruptcy (IBC) Law of 2016, a CIRP process should ideally be completed within 330 days. Despite the Supreme Court's intervention in this matter since the CIRP process began, buyers are yet to get any respite. JIL homebuyers say that the delay crossed all limits in this case when the resolution process entered its 6th year on August 9, 2022.
Rashmi Singhal bought a flat in JIL's Wishtown Krescent Homes project in Noida in 2010. She feels agitated since the fate of her apartment remains unknown even after over a decade-long wait. "I have been living in rented accommodation for the past 12 years while paying my Equated Monthly Installment (EMI) to the bank for this flat. Isn't that unfair?" she questioned.
She adds that her only daughter was very young when she booked the flat. "Today, she has completed her studies and has started working. Sadly, my dream of living with my daughter in my own house remains unfulfilled. I hope that the government and judiciary would take cognisance of the pain homebuyers are experiencing and help them get their homes," she said.
So, Why This Delay?
On August 9, 2017, the NCLT Allahabad ordered the appointment of an Internal Resolution Professional (IRP), Anuj Jain, who replaced the company's directors. After the IRP, when he invited companies with resolution plans, a volley of cases was filed in the Supreme Court on several contentious issues. Due to these litigations, the CIRP process couldn't be completed within the specified 330-day time frame.
On November 6, 2019, the apex court settled most of the litigations and asked the IRP to complete the CIRP process in 90 days. Back then, there were two companies in the fray to take over Jaiprakash Infratech Limited – NBCC and Suraksha.
The Committee of Creditors (CoC) voted for NBCC and rejected Suraksha's plan. NBCC's plan was submitted to the NCLT for approval, and the Tribunal approved it, albeit with certain modifications. The NBCC challenged those modifications in the Supreme Court.
On March 24, 2021, the SC rejected the NBCC plan and asked the IRP to start the CIRP process all over again. Exactly two months later, the CoC approved Suraksha's resolution plan, which was submitted to the NCLT on July 7, 2021.
Since then, this case has been pending with the Tribunal for its approval. Only the Yamuna Expressway Industrial Development Authority (YEIDA) has completed its argument against the plan. The three other parties—ICICI Bank, Bank of Baroda and Jaiprakash Associated Limited—are yet to give their submission against the plan.
"Let's presume that the NCLT gives its verdict in favour of Suraksha. This will be challenged before NCLAT. The NCLAT's decision will surely be challenged in the Supreme Court. All these will take a lot of time, and buyers will be at the receiving end," said Ashish Mohan Gupta, a homebuyer and a petitioner in the Supreme Court.
Gupta, also the President of JIL Real Estate Allottees Welfare Society, added, "There are about 33,000 flats out of which over 3000 were constructed and delivered to the homebuyers before the beginning of the CIRP process. In the past five years since IRP's appointment, 8000 flats have been constructed."
The Long Wait
Around 22,000 homebuyers have been waiting for their flats for over a decade. If the NCLT does not expedite the hearing around the resolution plans, these homebuyers will be subject to unending pain and trauma.
"The lawmakers should think that when the assets are more than liabilities, why that company should be admitted under IBC, especially a real estate company where the right of living of thousands of homebuyers is at stake," Ishwar Kewalramani, another buyer, questioned.
Tejendra Khanna, a charted accountant who is also one of the allottees of an apartment in the Krescent Homes project, says that under the resolution plan, banks will get land whose price will keep on appreciating with the passage of time.
"However, our flats price will keep depreciating because the structure is exposed to extreme weather conditions and getting older and older daily. Isn't it an irony that the CIRP process is to serve the interest of the homebuyers, but the reality is just the otherwise?" Khanna asked.
For the scores of homemakers waiting for a definitive closure, there seems to be no light at the end of the tunnel. If anything, things look as dim as they did when JIL started its insolvency process in 2017. They are hoping for a glimmer of hope. Is the judiciary listening?
