In view of the recent amendments in the Insolvency and Bankruptcy Code that improved the status of homebuyers, the Insolvency and Bankruptcy Board of India (IBBI) and Interim Resolution Professional (IRP) on Wednesday urged the Supreme Court to constitute a fresh Committee of Creditors (CoC) in the Jaypee Infratech case.
Additional Solicitor General Tushar Mehta, appearing for IBBI, told a bench led by Chief Justice Dipak Misra that the Insolvency and Bankruptcy (Amendment) Ordinance, 2018, (which came into force from June 6), has drastically improved the “status of homebuyers not just as stakeholders, but as participators and initiators of the insolvency process.”
“Homebuyers have now been included as ‘financial creditors’ under IBC, thereby creating an unprecedented right in their favour… the homebuyers/allotees are now financial creditors and hence, necessarily a part of CoC through their authorised representatives,” Mehta said.
“Given the unique trajectory of the matter, the interest of the homebuyers can be protected by constituting a fresh CoC to include the authorised representatives of homebuyers,” he argued, adding that JIL is making “surreptitious attempt” to take back administration even though it is barred (ineligible) under Section 29A. Supporting Mehta’s view, senior counsel Prag Tripathi, appearing for IRP, also asked the SC to revive the CoC as per the new provisions. The two shortlisted bidders – Lakshdeep Investments and Finance and Cube-Kotak consortium – argued that they should be reconsidered by the new CoC which now gives voting rights to the homebuyers.
Singapore-based Cube Highways, through senior counsel Gopal Jain, argued that it was willing to bring in Rs 3,300 crore upfront for takeover of the 165-km Yamuna Expressway road assets and can deposit the money in a month. Even Lakshdeep, through senior counsel Jayant Bhushan, told the judges that its proposal was found to be the best by the CoC, but its offer was rejected as it was found to be lower than the liquidation value of JIL.