News Point: Homebuyers oppose liquidation of Jaypee Infratech and are okay if the company bids to complete the projects with binding commitment with the Supreme Court.
The Jaypee buyers question the devaluation of assets by bidders.They do not believe that any new builder will be able to do justice with these projects.
“The Insolvency and Bankruptcy Code (IBC) which was largely meant for distressed industrial companies does not apply for real estate companies. All such companies have depreciating assets therefore IRP was allowed to place a Distress Sale Value (DSV) of assets. Real estate projects include land and buildings which are appreciating assets so it was wrong to place a Distress Sale Value on such assets. This is why, we oppose the liquidation of Jaypee Infratech under the IBC,” says Arvind Jain, President, Developers Township Property Owners Welfare Society, Noida. The association was formed by Jaypee Infratech’s homebuyers in 2014.
“Jaypee assets have fast appreciation potential due to oncoming Jewar Airport and Metro. Last year IDBI, had recorded asset value at about INR 14,500 – 15,500 crore. How that has been reduced to just INR 8000 crore now? After a year, the value should have rather increased! Does it not look like an effort to sell the company for pittance?” Jain questions.
COC has already rejected the Suraksha’s Bid after due deliberation and more than 90% votes against this bid. JAL has been allowed to make a bid by the Hon’ble Supreme Court of India, which is much higher than the Suraksha. Why JAL should not be given a second chance if he is willing to honour its all previous obligations, the homebuyers ask.
They maintain that the liquidation will not serve any purpose. Everybody including Supreme Court agrees that it will not serve any purpose. The Supreme Court may order a vote by homebuyers in next hearing. In buyer’s minds, the current choice seems to be between Jaypee and Surkasha.
