In a temporary relief to the 18,000 odd home-buyers of Noida-based Jaypee Infratech Ltd (JIL), the Supreme Court on Wednesday stayed the liquidation proceedings against the company.

In addition, the court also directed the parent company of JIL, Jaiprakash Associates Ltd (JAL), to deposit an additional Rs 1,000 crore with the court registry for the purpose of refunding the affected home buyers.

Read also: What lies ahead for the hapless Jaypee homebuyers

This amount is part of the Rs 2,000 crore that the apex court had earlier asked JAL to deposit for the refund, of which only Rs 750 crore has been given so far.

The legal counsel for the resolution professional, Parag Tripathi, also submitted before the court that promoter Manoj Gaur’s offer of close to Rs 10,000 crore for JIL was rejected by lenders.

The offer was rejected as it was not eligible under Section 29A of the Insolvency and Bankruptcy Code (IBC) and Gaur did not have any source of funds for construction of homes for home buyers.

Watch: Home buyers protest at Jaypee Infratech's Noida office

Tripathi also argued that the promoters had failed to keep up their commitment to the home-buyers and lenders in the past as well.

Why Liquidation in the First Place?

In a meeting of the committee of creditors held on May 9, the resolution plan of Rs 7,350 crore offered by Lakshadweep Pvt Ltd, a joint venture between Suraksha ARC and Dosti Realty, was rejected by the lenders.

Bankers CNBC-TV18 spoke to said the offer was too low, and it under-valued the company.

The liquidation value of JIL is said to be in the range of Rs 12,000-14,000 crore.

Read also: Lenders reject Lakshadweep’s offer to buy Jaypee Infratech

JAL has already informed the court that they are under debt restructuring, and unable to deposit funds at the moment.

If liquidation proceedings against the company have to be stopped for good, experts say the apex court may uphold the offer submitted by Lakshadweep, or ask the lenders to re-negotiate the resolution plan with the highest bidder, Lakshdweep.

It may even ask Gaur to present a concrete proposal for revival of the company showing the source of funds, or it could rope in the govt to bring in a third party to finish the project. The ball in now in Supreme Court. The court will next hear the matter on July 4.

Last year, the National Company Law Tribunal (NCLT) had admitted the application by an IDBI Bank-led consortium, seeking resolution for JIL under the IBC.

First Published:May 16, 2018 4:52 PM IST