2017 (9) TMI 1900 - SC - Insolvency and Bankruptcy

Court Grants Application to Modify Order; IRP to Manage Jaypee Infratech Ltd.

The Court granted the application to vacate/modify the order dated 04.09.2017. The Interim Resolution Professional (IRP) was directed to manage Jaypee ... Application for vacating/modification of the order dated 04.09.2017 - restoration of Management of respondent No.3 – Jaypee Infratech Ltd. - HELD THAT:- Having heard learned counsel for the parties at length, in modification of the order dated 04.09.2017, we issue the following directions: a) The IRP shall forthwith take over the Management of JIL. The IRP shall formulate and submit an Interim Resolution Plan within 45 days before this Court. The Interim Resolution Plan shall make all necessary provisions to protect the interests of the home buyers; b) Mr.Shekhar Naphade, learned senior counsel along with Ms.Shubhangi Tuli, Advocate-on-Record, shall participate in the meetings of the Committee of Creditors under Section 21 of the Insolvency and Bankruptcy Code, 2016 to espouse the cause of the home buyers and protect their interests; c) The Managing Director and the Directors of JIL and JAL shall not leave India without the prior permission of this Court; d) JAL which is not a party to the insolvency proceedings, shall deposit a sum of ₹ 2,000 crores(Rupees two thousand crores) before this Court on or before 27.10.2017. For the said purpose, if any assets or property of JAL have to be sold, that should be done after obtaining prior approval of this Court. Any person who was a Director or Managing Director of JIL or JAL on the date of the institution of the insolvency proceedings against JIL as well as the present Directors/Managing Director shall also not leave the country without prior permission of this Court. The foregoing restraint shall not apply to nominee Directors of lending institutions (IDBI/ICICI/SBI); e) All suits and proceeding instituted against JIL shall in terms of Section 14(1)(a) remain stayed as we have directed the IRP to remain in Management. The matter be listed at 2.00 P.M. on 13.11.2017. Issues:1. Application for vacating/modification of the order dated 04.09.2017.2. Concerns regarding stay affecting management of respondent No.3.3. Protection of rights of creditors and consumers.4. Formulation of a preliminary scheme by the Interim Resolution Professional.5. Interest of home buyers and their representation in the proceedings.6. Directions regarding the Management of Jaypee Infratech Ltd. (JIL).7. Participation of counsel in the Committee of Creditors.8. Restrictions on Managing Director and Directors of JIL and JAL.9. Deposit of sum by JAL before the Court.10. Stay on suits and proceedings against JIL.11. Clarification on the order passed.Analysis:1. The judgment addresses an application for vacating/modifying the order dated 04.09.2017. The Attorney General expressed concerns that the stay might restore the management of respondent No.3, impacting creditors and consumers. The Court acknowledged the need to protect stakeholders' interests.2. The Interim Resolution Professional (IRP) was directed to take over the Management of Jaypee Infratech Ltd. (JIL) and formulate an Interim Resolution Plan within 45 days to safeguard the home buyers' interests, addressing concerns raised by various parties.3. Counsel representing home buyers emphasized their investment with JIL and sought protection for their interests. The Court directed the IRP to ensure provisions in the Interim Resolution Plan for the home buyers' benefit and appointed counsel to participate in the Committee of Creditors.4. Restrictions were imposed on the Managing Director and Directors of JIL and its holding company, Jai Prakash Associates Ltd. (JAL), preventing them from leaving India without Court permission. JAL was instructed to deposit a specified sum before the Court.5. The Court stayed suits and proceedings against JIL, emphasizing the importance of the order in line with the statutory provisions and the interest of home buyers. The judgment aimed to balance the rights of stakeholders while ensuring the effective resolution of the matter.6. Overall, the judgment focused on addressing the complex issues surrounding the management and resolution of Jaypee Infratech Ltd., prioritizing the protection of creditors, consumers, and particularly the interests of home buyers. The directions provided aimed at ensuring a fair and transparent resolution process in compliance with the relevant legal framework.