Trouble for the beleaguered Jaypee Infratech only seems to get bigger as more buyers from one of the real estate projects it was developing in Noida have filed case against the company at National Consumer Disputes Redressal Commission.
Delay in delivery forced as many as 211 buyers of the company’s Kensington Boulevard project in Jaypee’s Wish Town integrated city plan to Friday file the case seeking full compensation and refund of the money deposited by them.
The company was supposed to deliver the asset to the buyers by 2013 for the bookings made by them in 2010. The company wants another two to two-and-a-half years to deliver the promised flats, according to one of the buyers in the project.
The hearing on the case is set for August 18. Another set of buyers from the same project has also filed a case against the company. The hearing in this matter is scheduled for July 31.
The Kensington Boulevard project comprises 25 towers of flats and penthouses with around 2,500 buyers in Noida’s Sector 131. Kensington is one of several projects that were launched by the company as part of its proposed Wish Town integrated city during 2007-2012. Other projects, targeted at different buyer segments, include Aman, Kassia, Kalypso, Klassic, Krescent and Cosmos.
Cases over the same complaint of delayed delivery in these projects as well have been lodged by buyers with various authorities.
Jaypee Infratech had proposed to build 32,000 flats excluding some plot properties across various projects in the Wish Town city spread across 5 sectors in Noida along the Yamuna Expressway. Flats, penthouses, villas and plots were all part of these projects.
Jaypee’s Wish Town is one of the five integrated townships that the company planned to build over 25 million square meters of land. The development plan included commercial, amusement, industrial, institutional and residential purposes across the five locations—one in Noida, two in district Gautam Budh Nagar and one each in Aligarh and Agra.
Jaiprakash Associates, the flagship company of the Manoj Gaur-owned group, has 71.64% stake in Jaypee Infratech. Jaypee Infratech is one of the 12 companies shortlisted by the Reserve Bank of India for admission under the insolvency code.
IDBI Bank, one of the lenders to Jaypee Infratech, has already taken the company to the insolvency court, the National Company Law Tribunal, for initiation of bankruptcy proceedings. If IDBI’s plea is accepted, Jaypee Infratech’s board will be suspended and an interim resolution official – an official from one of the top five audit agencies – will get 270 days to turn around the company. In case the turnaround doesn’t happen, the company’s assets will be liquidated.
Buyers in Jaypee’s properties are a scared lot because if the assets are liquidated, the first right over the land on which Jaypee Wish Town is coming up would go to Yamuna Expressway Industrial Development Area.
As on March 31, 2017, the company had borrowings of Rs. 8,365 crores and an interest service coverage ratio of less than zero.