Chitra Sharma And Others v. Union Of India And Others

Factual and Procedural Background

The order arises in IA No. 219 of 2018 filed in Writ Petition (Civil) No. 744 of 2017 before the Supreme Court of India. The applicants are homebuyers who invested in projects of the holding company, Jaiprakash Associates Ltd. (JAL). They complain that, with no progress in construction and no clear remedy, they are effectively stranded. The Court had earlier issued various directions concerning JAL and its subsidiary Jaypee Infratech Ltd. (JIL). The present interlocutory proceedings seek further directions relating to the treatment of homebuyers, possible insolvency action against JAL, and the personal obligations of JAL’s independent directors.

Legal Issues Presented

1. Whether an independent web portal should be created to enable homebuyers of JAL to submit their claims.
2. Whether the Reserve Bank of India (RBI) should be granted leave to initiate proceedings against JAL before the National Company Law Tribunal under the Insolvency and Bankruptcy Code.
3. Whether the independent directors of JAL should continue to be required to remain personally present before the Court on each date of hearing and be subjected to travel restrictions.
4. Whether the existing injunction restraining JAL from creating third-party interests in its assets should continue.

Arguments of the Parties

Applicants (Homebuyers)

• Represented by Mr. Sidharth Luthra, Senior Counsel.
• Contended that homebuyers are in a precarious “trishanku” situation with no avenue for relief.
• Requested that the Amicus Curiae be directed to create a dedicated web portal so that JAL homebuyers can lodge their claims, subject to future Court orders.

Jaiprakash Associates Ltd. (JAL)

• Represented by Mr. Mukul Rohatgi, Senior Counsel, assisted by Mr. Anupam Lal Das.
• Submitted that JAL is not directly involved in the controversy necessitating a separate portal, implying that a new portal would be unnecessary.

Reserve Bank of India (RBI)

• Represented by Mr. Saurabh Kirpal, Counsel.
• Filed an application seeking the Court’s permission to approach the NCLT to initiate insolvency proceedings against JAL under the Insolvency and Bankruptcy Code.

Independent Directors of JAL

• Represented by Mr. Ranjit Kumar, Senior Counsel.
• Requested that the existing direction requiring their personal attendance before the Court be lifted.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court acknowledged the concerns of each stakeholder and crafted directions aimed at balancing competing interests:

• Recognising the homebuyers’ plight, the Court ordered JAL to file an affidavit within one week detailing all its housing projects and their stages of construction. This information is intended to assist the Amicus Curiae in addressing homebuyers’ claims.
• The Court directed the Amicus Curiae, Mr. Pawanshree Agarwal, to create an independent web portal exclusively for JAL homebuyers, ensuring their details are systematically recorded. Simultaneously, the existing portal for Jaypee Infratech Ltd. (JIL) is to remain operational.
• The Court deferred decision on RBI’s request to initiate insolvency proceedings, stating that the application would be considered at a later stage.
• Balancing the burden on JAL’s independent directors against the Court’s need to secure their cooperation, the Court excused them from attendance at every hearing but restricted them from leaving India without permission.
• The Court reiterated its earlier injunction restraining JAL from creating third-party interests in its assets, thereby preserving the status quo.
• All applications for impleadment or directions are to be served on the Amicus Curiae, ensuring centralized management of documentation.

Holding and Implications

ORDERED: The Supreme Court issued specific interim directions, including (a) a mandatory affidavit by JAL on its projects, (b) creation of a new web portal for JAL homebuyers, (c) maintenance of the existing JIL portal, (d) deferral of RBI’s insolvency application, (e) modification of attendance requirements for JAL’s independent directors, (f) continuation of the asset-alienation injunction, and (g) service of future applications on the Amicus Curiae. The matter is listed for further hearing on 5-2-2018.

Implications: The immediate effect is procedural—facilitating collection of homebuyer claims and maintaining asset preservation while postponing insolvency proceedings. No broader legal precedent is set, but the order provides a structured mechanism for addressing homebuyer grievances and preserves the Court’s supervisory role over JAL’s assets and management.