IDBI Bank rushes to SC with plea to review stay on Jaypee insolvency

Mumbai: The Supreme Court on Tuesday agreed to hear a plea brought in by the IDBI Bank over the apex court's order staying insolvency proceedings against Jaypee Infratech, a housing construction company. The SC had on Monday stayed the insolvency litigation.

Chief justice Dipak Misra had ordered the stay while disposing off a public interest litigation (PIL) brought before the apex court by a Delhi resident Chitra Sharma, one of the home-buyers who had booked flats in Jaypee Infratech project.

As the stay came in, as many as 32,000 home-buyers in Jaypee Infratech projects were told to fill up forms by August 31 in order to register claims as part of insolvency proceedings against the housing firm.

The Allahabad bench of National Company Law Tribunal had earlier gave a go-ahead for an insolvency proceedings to be started against Jaypee Infratech based on the provisions of Insolvency and Bankruptcy Code, 2016.   

In its fresh submission, the IDBI has sought from the top court modification of its stay order that came on Monday after Jaypee had approached the SC. The apex court has said it will take up the bank's plea at its next hearing on Monday.

However, those who had booked flats in Jaypee's housing projects  have opposed IDBI Bank's fresh submission before the Supreme Court. Earlier, as many as 32,000 home buyers who had purchased houses in Jaypee's projects had also rushed to the Supreme Court to safeguard their interests.

According to reports, Jaypee Infratech -- a subsidiary of Jaiprakash Associates -- defaulted or has not made return payment of Rs 526.11 crore of loans due to be paid back to IDBI Bank. The non-payment of dues attracted the IBC provisions and kick-started insolvency proceedings against the company.