No SC relief, but its nod must to bring in new developers for Jaiprakash Associates projects

Time of India

22-05-2025

NOIDA
: The Supreme Court on Monday refused to grant interim relief to
Jaiprakash Associates Limited
(JAL) in connection with the cancellation of 1,000 hectares allotted to it, but restrained
Yamuna Expressway Industrial Development Authority
(
YEIDA
) from appointing new developers without its permission. The ruling would impact over 4,500 homebuyers who have invested in 12 group housing projects stalled for years.
YEIDA now has initiated the process of appointing a consultant for evaluating the 1,000-hectare special development zone (SDZ) land that was allotted to JAL. This assessment, officials said, aimed at creating a comprehensive revival roadmap for the stalled projects.
YEIDA CEO Arun Vir Singh said the selected consultant would conduct a time-bound evaluation of the land and associated projects, examine the status of infrastructure, legal complications, and the progress of construction. The scope of work also includes verification of land ownership documents, assessment of regulatory compliance, and identification of vacant parcels.
According to officials, the consultant will analyse construction gaps against sanctioned plans in Sector 25 off the Yamuna Expressway, and suggest regularisation measures wherever needed. It will also assess market values of unsold inventory and prepare feasibility reports with cash flow projections. The consultant must submit its proposal on May 28. While technical bids will open on May 30, presentations are scheduled for June 3.
The SC ruling comes after JAL challenged an Allahabad High Court order of March 10 that supported YEIDA's Feb 2020 decision to cancel land allotment over unpaid dues.
JAL, which is undergoing corporate insolvency proceedings since June 2024, argued before the apex court that delays by YEIDA had hampered the progress of the projects, even though the company had built major facilities such as the Buddh International Circuit. The company's counsel and interim resolution professional told the apex court the Authority was already trying to bring in new developers despite the ongoing insolvency proceedings.
They insisted that the HC order led to the cancellation of only six allotment letters, leaving earlier lease deeds intact. The developer's lawyers warned that displacing JAL could compromise lenders and homebuyers with significant stakes in these projects.
The National Asset Reconstruction Company Ltd (NARCL) — representing the financial institutions — said it had extended loans of about Rs 50,000 crore to JAL, backed by mortgages approved by YEIDA. It claimed these arrangements gave the Authority a first charge on receivables, seeking continuation of a 2020 high court status quo order. NARCL argued that cancellation was unwarranted because Section 14(1)(d) of the Insolvency and Bankruptcy Code forbids asset transfers during moratorium.
YEIDA, in its part, defended the cancellation, saying JAL had developed less than 5% of the land in over a decade and defaulted on financial commitments, leaving thousands of homebuyers stuck. Under Section 13A of the UP Industrial Area Development Act 1976, YEIDA is a secured creditor and can act in public interest. The Authority maintained the high court's decision safeguarded banks, lenders, and homebuyers.
The SC also heard about an ongoing CBI investigation into alleged diversion and misappropriation of homebuyers' funds. YEIDA's counsel said UP govt had formed a committee to implement the HC order and meetings had been initiated with homebuyers to find a solution. The SC insisted on protecting banks and lenders, and scheduled the next hearing for July 29.
Homebuyers' associations told the court they filed impleadment applications, alleging that JAL withheld essential data and documents from the resolution professional. They said better transparency was needed at this time to safeguard the buyers' interests.