SC stays NCLT Allahabad order initiating insolvency proceedings against Jaypee Infratech
The Hopn’ble Supreme Court today stayed the order of the Allahabad Bench of the National Company Law Tribunal (NCLT) directing initiation of insolvency proceedings against Jaypee Infratech.
The lead petitioner contends that the regime brought about by the Insolvency and Bankruptcy Code, 2016 and the order passed by the Allahabad Bench of the NCLT in the petition titled IDBI Bank vs. Jaypee Infratech Limited, have left the flat buyers without any remedy.
The actions taken under the Code has led to a situation wherein the lifelong savings of the flat owners will go to waste with no prospects of them recovering the same. The buyers, who have booked their homes in different housing projects of Jaypee Infratech, have been left stranded due to the insolvency proceedings initiated against Jaypee.
Section 14 of the Code further prevents the flat owners from approaching the National Consumer Disputes Redressal Commission against Jaypee for deficiency of service, while the owners of flats built by other infrastructure and real estate companies have been given the liberty to do so. This is in violation of Jaypee flat owners’ fundamental right to equality under Article 14 of the Constitution.
The misery of the flat owners is compounded by the fact that the NCLT on August 9 issued a moratorium halting several pending litigation before the consumer forums established under Consumer Protection Act, 1986. It mandates a declaration and forces the aggrieved flat owners as consumers to declare themselves as creditors so that they can be subjected to the liquidation proceedings undertaken by the Official Liquidator in compliance of the NCLT order.