Noida Homebuyers Approach NCLT Over Jaypee Infratech Delays
Real Estate

Noida Homebuyers Approach NCLT Over Jaypee Infratech Delays

Homebuyers of Jaypee Infratech (JIL) have approached the National Company Law Tribunal (NCLT), accusing Suraksha Group of failing to make progress on the construction of flats, despite the approval of its resolution plan in March 2023 and its subsequent confirmation by the appellate tribunal in May 2023.

In their petition, members of the Jaypee Infratech Real Estate Allottees Welfare Society (JREAWS) claimed that Suraksha, which took over JIL through insolvency proceedings, had not mobilised the Rs 30 billion required for construction, deployed workers, or set up escrow accounts as per the resolution plan.

As per the resolution plan approved by the National Company Law Appellate Tribunal (NCLAT) in May 2023, Suraksha was supposed to resume construction within 90 days. Furthermore, the buyers alleged that Suraksha had engaged in asset stripping, imposed increased charges, and lacked transparency regarding crucial structural audits. Suraksha had also promised to develop a mobile application to keep homebuyers updated about the status of construction, outstanding dues, and timelines, but this had not been done.

The tribunal heard the buyers' appeal on December 10 and issued notices to Suraksha, JIL, the Insolvency and Bankruptcy Board of India (IBBI), and Anuj Jain, the former interim resolution professional (IRP). The next hearing is scheduled for January 8.

Ashish Mohan Gupta, the president of JREAWS, stated that no funds had been mobilised, severely hampering the project's progress. He referred to the Rs 30 billion that Suraksha was supposed to raise to resume construction across nine delayed projects. The buyers, who had been waiting for their flats for over a decade, said that construction had completely ceased, despite Suraksha’s assurances of speeding up the process starting from the fourth month after the resolution plan's approval.

The limited work done during the IRP regime stopped after the previous contractor was removed. By August 2024, tenders had been floated for only 41 towers out of 97 across nine projects, with no progress on the remaining 56.

Instability surrounding Suraksha's leadership has further complicated the situation. Two of the three key managerial officials appointed to oversee the implementation of the resolution plan had resigned. Aalok Dave, the executive director, managing director, and CEO, resigned on November 30, while Suresh Bansal, the additional executive director, left on August 17.

The homebuyers also alleged that Suraksha had unilaterally raised administrative and transfer charges, demanding more than Rs 8,000 per sqft for unsold units, which was significantly higher than the resolution plan’s estimate of Rs 4,575.

The company had also failed to share a structural audit report prepared by IIT-Delhi, which raised concerns about safety.

Suraksha, on the other hand, stated that it had secured a Rs 1.25-billion debt facility, a Rs 30-billion credit line, and Rs 10 billionin fixed deposits to fund the project. According to the resolution plan, the group was expected to deliver homes to 1,700 buyers in Wish Town, Mirzapur, and Agra within four years.

Sources within the company acknowledged that construction had been affected by various stages of the Graded Response Action Plan (GRAP) imposed since November.

For the buyers, patience was running out. Gupta expressed that their dreams of owning a home were fading due to the unwarranted delays, and emphasized that immediate action was needed on the ground.

Homebuyers of Jaypee Infratech (JIL) have approached the National Company Law Tribunal (NCLT), accusing Suraksha Group of failing to make progress on the construction of flats, despite the approval of its resolution plan in March 2023 and its subsequent confirmation by the appellate tribunal in May 2023. In their petition, members of the Jaypee Infratech Real Estate Allottees Welfare Society (JREAWS) claimed that Suraksha, which took over JIL through insolvency proceedings, had not mobilised the Rs 30 billion required for construction, deployed workers, or set up escrow accounts as per the resolution plan. As per the resolution plan approved by the National Company Law Appellate Tribunal (NCLAT) in May 2023, Suraksha was supposed to resume construction within 90 days. Furthermore, the buyers alleged that Suraksha had engaged in asset stripping, imposed increased charges, and lacked transparency regarding crucial structural audits. Suraksha had also promised to develop a mobile application to keep homebuyers updated about the status of construction, outstanding dues, and timelines, but this had not been done. The tribunal heard the buyers' appeal on December 10 and issued notices to Suraksha, JIL, the Insolvency and Bankruptcy Board of India (IBBI), and Anuj Jain, the former interim resolution professional (IRP). The next hearing is scheduled for January 8. Ashish Mohan Gupta, the president of JREAWS, stated that no funds had been mobilised, severely hampering the project's progress. He referred to the Rs 30 billion that Suraksha was supposed to raise to resume construction across nine delayed projects. The buyers, who had been waiting for their flats for over a decade, said that construction had completely ceased, despite Suraksha’s assurances of speeding up the process starting from the fourth month after the resolution plan's approval. The limited work done during the IRP regime stopped after the previous contractor was removed. By August 2024, tenders had been floated for only 41 towers out of 97 across nine projects, with no progress on the remaining 56. Instability surrounding Suraksha's leadership has further complicated the situation. Two of the three key managerial officials appointed to oversee the implementation of the resolution plan had resigned. Aalok Dave, the executive director, managing director, and CEO, resigned on November 30, while Suresh Bansal, the additional executive director, left on August 17. The homebuyers also alleged that Suraksha had unilaterally raised administrative and transfer charges, demanding more than Rs 8,000 per sqft for unsold units, which was significantly higher than the resolution plan’s estimate of Rs 4,575. The company had also failed to share a structural audit report prepared by IIT-Delhi, which raised concerns about safety. Suraksha, on the other hand, stated that it had secured a Rs 1.25-billion debt facility, a Rs 30-billion credit line, and Rs 10 billionin fixed deposits to fund the project. According to the resolution plan, the group was expected to deliver homes to 1,700 buyers in Wish Town, Mirzapur, and Agra within four years. Sources within the company acknowledged that construction had been affected by various stages of the Graded Response Action Plan (GRAP) imposed since November. For the buyers, patience was running out. Gupta expressed that their dreams of owning a home were fading due to the unwarranted delays, and emphasized that immediate action was needed on the ground.

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