Six years of IBC - impact on Real Estate sector

Six years of IBC 2016 www.infralive.com 38 InfraLIVE January 15, 2023 orders passed against the com- pany. However, the court clarified that such moratorium shall not impede any investigation or prosecution against the erstwhile management or officers, and statutory entitlement of the EPFO and other related statutory dues against the erstwhile management of the company. The court also allowed the board of directors to appoint various professionals for its assistance. In furtherance of the same, the board of directors a pp o i n t e d De l o i t t e Tou c h e Tohmatsu India LLP as its profes- sional advisor for assistance in preparation of the Resolution Framework. The Apex Court also appointed Justice Abhay Manohar Sapre, a former Judge of Supreme Court to assist the Board of Management in monetisation of the land assets. Justice Sapre was also requested to scrutinise all tender documents including the underlying financials having due regard to the report which would be submitted by the EIL after verification of the cost estimates which are submitted by the project monitoring committees (PMCs). Justice Sapre was also associated with every stage of the tendering process. The new board has submitted a c omp r e h e n s i v e R e s o l u t i o n Framework for approval before the Supreme Court in July 2020. The said resolution framework has been twice modified by the Board and submitted to the Apex Court for approval and necessary direc- tions. The Resolution Framework is yet to be approved. 4 directors of the New Board have resigned Meanwhile, four directors (50 pc) of the New Board have resigned in April/ August 2022. Another director has since been appointed. Due to strenuous efforts under- taken by Supreme Court in more than 100 sittings over last six years, hundreds of homebuyers have been benefitted. They have either been given their flats or refund of their money. A number of land assets of the company across the country has been mone t i sed and severa l projects have been completed. Hundreds of senior citizens have been refunded their life savings fixed deposits. However, tens of thousands of homebuyers are still eagerly waiting for their turn. Many of them had booked their apart- ment a decade ago. About 50 projects are still way behind. How long they will have to wait for! No one knows. There is no future for other financial creditors like banks/ financial institutions or operational creditors. On whose savings, these banks lend from! We need to ponder. It's all savings of commonman. Jaypee Infratech Ltd In mid 2017, IDBI Bank, a financial creditor approached the NCLT, Allahabad under section 7 of the IBC 2016 for initiating CIRP of Jaypee Infratech Ltd (JIL) for making defaults in payment of debts/ loans of Rs 526 crore. NCLT, Allahabad admitted the CIRP pe t i t i on on Augus t 9 , 2017 , appointed Interim Resolution Professional (IRP) and issued moratorium orders under section 14 of the IBC2016. JIL is a special purpose com- pany, promoted by Jaiprakash Associates Ltd (JAL), for design, engineering and construction of 165 kms long six lanes Yamuna expressway between Noida and Agra. As a concessionaire, JIL was granted rights to develop 25million square metres of land in Noida and along the Yamuna Expressway at five locations for residential commercial, amusement, institu- tional and industrial use. However, when the IRP invited claims in this CIRP, the treatment of homebuyers became a conten- tious issue, because they were treated only as 'other creditors', not at par with financial and opera- tional creditors. In September 2 0 1 7 , a s e t o f a g g r i e v e d homebuyers approached the Supreme Court with a writ petition (WP-Civil No. 744 of 2017: Chitra Sharma and Ors. v. Union of India Apart from making the above findings, the Forensic Auditors have stated in their interim report that there has been a serious mis- representation by Unitech IT team relating to the availability of electronic information. This pertains to information which has been held by Sunil Keswani, Ex- CFO, Manoj Popli and by the promoters, Ramesh Chandra, Ajay Chandra and Sanjay Chandra. Management of Unitech Ltd suspended After reviewing the interim report of Forensic Auditors, Supreme Court felt that the Union of India must step in forthwith by suspending the management of Unitech Ltd and appoint independ- ent directors to take over the management of the company. The bench also directed that the report of the Forensic Auditors be made available to all concerned agencies of the Union of India for further action. In December 2021, the ED arrested promoters of Unitech Ajay Chandra and Sanjay Chandra in the money laundering case. Appointment of independent directors on theBoard Accordingly, based on the proposal of the union government for appointment of nominee directors to the Board of Unitech Ltd to take over the management of the company, the Supreme Court approved the appointment of 8 independent directors under the chairmanship of Yudhvir Singh Malik, IAS (Retd.) on the board of the company to take over its management. The court also directed the newly constituted board to take a compre- hensive view of all pending and other projects and prepare a resolution framework for the company within a period of two months and submit the same to the court. The court declared morato- rium against the institution of proceedings against the company and its subsidiaries, and against continuation of existing proceed- ings as well as enforcement of