NCLT Petition Filed by Jaypee Homebuyers Over Delayed Construction and Unfulfilled Promises

Homebuyers of Jaypee Infratech Ltd (JIL) have once again turned to the National Company Law Tribunal (NCLT) after accusing the Suraksha Group of failing to meet its obligations under a resolution plan approved earlier in 2023. Despite promises made during the insolvency proceedings, the construction of flats has remained stagnant, and the homebuyers have raised concerns about Suraksha’s failure to mobilize the required funds and resources to resume work.

Suraksha had been appointed to take over Jaypee Infratech following insolvency proceedings, with a resolution plan that was meant to address the long-standing delays in the completion of several real estate projects. As per the plan approved by the NCLT, Suraksha was expected to mobilize a substantial Rs 3,000 crore in funding, deploy workers to restart construction, and set up escrow accounts to manage project funds. However, the homebuyers have pointed out that none of these critical steps have been taken, despite assurances from the company.

The resolution plan, which had been passed by the NCLAT (National Company Law Appellate Tribunal) in May 2023, had clearly stated that construction work should have resumed within 90 days. However, months have passed, and the construction activities remain halted. The homebuyers have further accused Suraksha of stripping valuable assets, increasing charges, and failing to provide transparency regarding structural audits. The promised mobile application, intended to update homebuyers on construction progress, outstanding dues, and timelines, has not been developed either.

The homebuyers, who have been waiting for their flats for over a decade, claim that no significant progress has been made, despite the fact that Suraksha had assured them of accelerated construction from the fourth month after the resolution plan's approval. Of the 97 towers across nine delayed projects, tenders were only floated for 41 towers by August 2024, with no activity on the remaining 56 towers.

The homebuyers’ grievances have been exacerbated by the lack of stability in Suraksha's leadership. Two key managerial officials, including the managing director and the executive director, resigned in the months following the resolution plan’s approval. These resignations have raised concerns among the buyers about the company’s commitment to fulfilling its promises.

Another issue that has further fueled discontent among the homebuyers is the increase in administrative and transfer charges. Suraksha has reportedly demanded more than Rs 8,000 per square foot for unsold units, a steep rise compared to the earlier estimate of Rs 4,575 per square foot. The buyers are concerned that this increase is an attempt to recover costs at their expense, further burdening those who have already been waiting for their homes for an extended period.

Moreover, safety concerns have been raised by the buyers due to the lack of access to the structural audit report, which was conducted by IIT-Delhi. This report, they allege, should have been shared with them to provide clarity on the safety of the buildings. With construction work stalled and no clarity on the structural integrity of the projects, many buyers are anxious about the long-term prospects of their investments.

Suraksha has defended itself by claiming that it has secured a Rs 125-crore debt facility and a Rs 3,000-crore credit line, along with Rs 1,000 crore in fixed deposits to fund the projects. Despite these claims, the homebuyers remain skeptical, with their patience running thin. They have waited for years for their flats, and the lack of progress has left them frustrated and disillusioned.

While Suraksha has promised to deliver homes to 1,700 buyers in key locations like Wish Town, Mirzapur, and Agra, the delays have cast doubt on whether these timelines can be met. The company's inability to make headway on the construction front has led to growing unrest among the buyers, who are demanding immediate action and accountability from Suraksha.

The buyers’ plea for a resolution was heard by the NCLT on December 10, and notices have been issued to Suraksha, Jaypee Infratech, the Insolvency and Bankruptcy Board of India (IBBI), and Anuj Jain, the former interim resolution professional (IRP). A follow-up hearing is scheduled for January 8, 2025, to address the ongoing concerns and determine the next course of action. 

Image source- scobserver.in