Supreme Court restrains directors of JAL from alienating properties

In a stern message to embattled realty firm Jaiprakash Associate Limited (JAL), the Supreme Court today directed its 13 directors not to alienate their personal properties and asked the company to pay up Rs 275 crore by December end "like a good kid".

A bench headed by Chief Justice Dipak Misra accepted a demand draft of Rs 275 crore submitted by the real estate firm today and directed it to pay another two tranches of Rs 150 crore and Rs 125 crore respectively by December 14 and 31.

The top court also made it clear that it was granting "indulgence" to allow the firm to deposit Rs 2,000 crore in instalments as the interest of homebuyers was "paramount".

"Agli tareekh ko achhe bachhe ki tarah paise deposit kar dena (deposit the money like a good kid on the next date of hearing)," the bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said.

It restrained 13 directors, including five promoters and eight independent directors, from alienating their personal properties as well as of their immediate family members.

The apex court's direction that the directors shall not alienate their or their family members' personal properties in any manner implies freezing of their assets.

"This court has nothing against you. Homebuyers needed to get back their money. These people (directors) have gone to the top at the expense of homebuyers' money. You mortgage, sell your assets, jewellery and pay back. Otherwise we will attach your properties," the bench said.

It also warned the directors that any violation of its directive would hold them liable for criminal prosecution and contempt action.

"Buyers must be paid back their money ... Do not destroy the life-time savings of middle-class home buyers," it said.

The JAL directors, who were asked to appear in person, appeared today and filed affidavits giving details of their personal assets. The court has now asked them to appear again on January 10, the next date of hearing.

The bench, meanwhile, appointed lawyer Pawan Shree Agrawal as an amicus curiae and asked him to set up within a week, a web portal which would contain all details including grievances of the hassled homebuyers.

Senior advocates Mukul Rohatgi and Ranjit Kumar, who appeared on behalf of the directors, sought some more time for depositing money in the court.

Senior advocate Kapil Sibal, appearing for the real estate company, said adequate time should be given to the firm to arrange the money or the firm may go the Sahara way.

During the hearing, Sibal said the company would deposit Rs 275 crore today and sought time till June next years for depositing more money.

"The idea is to pay the money. The fact that JAL will go into liquidation will not help anybody. The company wants to pay and deliver possession. It has 50,000 employees," he said.

Attorney General K K Venugopal alleged that the company had diverted funds and a forensic audit was required to probe its affairs.

The apex court, on November 13, had also restrained the managing director and the directors of Jaypee Infratech Ltd from travelling abroad without prior permission.

While the company had then said it was willing to deposit the money, the plea was opposed by one of its bankers, ICICI Bank, on the ground that it would not be feasible as the process of loan restructuring was on.

The court had asked Jaypee Infratech to hand over the records to the interim resolution professional (IRP) to draft a resolution plan indicating protection of interests of over 32,000 hassled home buyers and creditors.

It also stayed any proceedings instituted against Jaypee Infratech for any purpose in any forum like the consumer commission, as the IRP has been given control of the company's management.

Homebuyers including one Chitra Sharma had moved the apex court saying that around 32,000 people had booked their flats and are now paying installments.

The top court had on September 4 stayed insolvency proceedings against the real estate firm at National Company Law Tribunal (NCLT).

Flat buyers, under the Insolvency and Bankruptcy Code of 2016, do not fall in the category of secured creditors like banks and hence they can get back their money only if something is left after repaying the secured and operational creditors, Sharma, in her plea, said.

Hundreds of home buyers have been left in the lurch after the NCLT, on August 10, admitted the IDBI Bank's plea to initiate insolvency proceedings against the debt-ridden realty company for defaulting on a Rs 526 crore loan, the plea said. PTI SJK ABA MNL