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Smart Summary

Factual and Procedural Background

These proceedings arise out of WP (C) No. 744 of 2017 and connected petitions before the Supreme Court of India. The principal parties are Jaiprakash Associates Ltd. (JAL), the holding company of Jaypee Infratech Ltd. (JIL), and various stakeholders including homebuyers and financial institutions. The Court was asked to address several interim applications (IAs), including an application for impleadment, an application by an independent director of JAL seeking permission to travel abroad, and issues relating to the ongoing insolvency/liquidation process of JIL. The matter is at an interlocutory stage, and the order sets out conditions regarding deposits, stays, and management during the insolvency resolution process.

Legal Issues Presented

The opinion addresses a procedural matter and does not frame distinct legal issues.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court issued directions after hearing counsel:

  • Impleadment: The application for impleadment was allowed without reservation.
  • Travel Permission: Mr. Sundaram Balasubramanian, an independent director of JAL, was permitted to travel to the United Kingdom and Singapore between June and August 2018, conditional upon filing his travel itinerary and an undertaking to return by 25-5-2018.
  • Deposit Requirement & Conditional Stay: JAL was ordered to deposit an additional Rs 1,000 crores by 15-6-2018, jointly and severally liable. Compliance would result in a stay of liquidation proceedings; non-compliance would allow statutory proceedings to continue. The Interim Resolution Professional (IRP) would remain in management during this period.
  • Disbursal of Existing Funds: The Rs 750 crores already deposited is to be distributed pro rata among homebuyers.
  • Formulation of Disbursal Plan: The Amicus Curiae, Mr. Pawanshree Agrawal, submitted a proposal for disbursal. Representatives of PNB Housing Finance Ltd. and Axis Bank agreed to collaborate with him on a detailed plan. Homebuyers wishing to switch from refund to possession of flats could inform the Amicus.
  • Investment Directions: Fixed Deposit Receipts (FDRs) of Rs 275 crores and Rs 150 crores must be renewed; an additional Rs 100 crores is to be invested in an interest-bearing short-term deposit at UCO Bank, Supreme Court Compound, New Delhi.
  • Next Hearing: The matter was listed for 4-7-2018 for further review.

Holding and Implications

HOLDING: The Court allowed the impleadment application, granted conditional travel permission, directed JAL to deposit Rs 1,000 crores by 15-6-2018, stayed liquidation proceedings conditionally, ordered pro rata disbursal of Rs 750 crores to homebuyers, mandated renewal and investment of specific FDRs, and fixed the next date of hearing.

IMPLICATIONS: The order provides interim relief to JAL by conditionally staying liquidation while safeguarding the interests of homebuyers through immediate partial disbursal of funds and continued management by the IRP. It imposes a strict timeline for financial compliance and structures oversight for future disbursal proposals. The decision is procedural and case-specific, setting no new precedent beyond the immediate parties.

    Chitra Sharma And Others v. Union Of India And Others

    Order

    IAs Nos. 67414 of 2018 in WP (C) No. 744 of 2017

    1. This is an application for impleadment. The IA is allowed.

    IA No. 67416 of 2018 in WP (C) No. 744 of 2017

    2. This is an application filed on behalf of Mr Sundaram Balasubramanian, an independent Director of Jaiprakash Associates Ltd. (JAL) seeking permission to travel to UK and Singapore between June and August, 2018. The permission is granted subject to filing of the itinerary before this Court along with an undertaking to come back. The itinerary and undertaking shall be filed by 25-5-2018. The application is accordingly allowed.

    WP (C) No. 744 of 2017 and connected petitions

    3. Having heard the learned counsel for the parties at length, it is directed that Jaiprakash Associates Ltd. (JAL), the holding company of Jaypee Infratech Ltd. (JIL) shall deposit a further sum of Rs 1000 crores jointly and severally by 15-6-2018. Subject to the said deposit, there shall be a stay of further proceedings only insofar as the liquidation is concerned. In the meantime, Interim Resolution Professional (IRP) shall remain in management. If the amount is not deposited by 15-6-2018, the statutory proceedings shall continue. As far as Rs 750 crores, which is lying in deposit is concerned, it has to be disbursed on pro rata basis amongst the homebuyers.

    4. At this juncture, Mr Pawanshree Agrawal, learned Amicus Curiae has submitted a proposal for disbursal. Mr C.A. Sundaram, learned Senior Counsel appearing for PNB Housing Finance Ltd. and Mr Priyank Ladoia, learned counsel appearing for Axis Bank have agreed to depute their representatives to meet Mr Pawanshree Agrawal, so that a proposal can be discussed by them and filed before this Court. If any of the homebuyers wants to change his/her option from seeking refund to seeking flat, he may intimate Mr Pawanshree Agrawal, learned Amicus Curiae.

    5. Keeping in view the office note, it is directed that the FDRs of Rs 275 crores and Rs 150 crores shall be renewed and Rs 100 crores shall be invested in an interest-bearing short-term fixed deposit in UCO Bank, Supreme Court Compound, New Delhi. List the matter on 4-7-2018.

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    Chitra Sharma And Others v. Union Of India And Others
    (May 16, 2018)