The Supreme court said that liquidation of JIL would not subserve the interests of the home buyers (File)
The Supreme Court today observed that having a house for a family was a "basic human yearning" wherein hard earned money was invested in the hope of obtaining a roof over their heads.
A bench headed by Chief Justice Dipak Misra made the observation in a verdict in which the top court ordered re-commencement of resolution process against Jaypee Infratech Ltd (JIL) and barred the firm, its holding company and their promoters from participating in the fresh bidding process.
The bench, also comprising Justices AM Khanwilkar and DY Chandrachud, noted in its judgement that during the hearing in the matter, there was a unanimity that liquidation of JIL would not subserve the interests of the home buyers.
"The home buyers have made valuable investments by contributing hard earned monies in the hope of obtaining a roof over their heads. A home for the family is a basic human yearning," the bench said.
"In diverse contexts it (having a home) has been held by this court to be a part of the right to life, as a fundamental constitutional guarantee," it said.
Besides this matter, the top court is presently seized of issues related to real estate firms including Unitech, Supretech and Amrapali in which hassled home buyers are engaged in legal battle to get possession of their flats.
In its verdict, the top court said that all the counsel representing the home buyers had earnestly appealed to the court to exercise its jurisdiction to ensure "complete justice" instead of leaving them to the mercy of liquidation process.
"The court appreciates the substance in that plea, understanding at the same time, the need to abide by the discipline of the law," it said.
The bench observed there was "no manner of doubt" that JIL and Jaiprakash Associates Ltd (JAL), the holding company of JIL, lacked financial capacity and resources to complete unfinished housing projects in which 21,532 home buyers have not been given possession of their flats.
"The home buyers have urged before this court that they have no confidence in the ability of either JIL or JAL to complete the outstanding projects."
"The home buyers have urged that they have been left in the lurch by the developers who have miserably failed to fulfil their contractual obligation by allotting flats on time," the bench said.
It referred to the data placed before it by an advocate, assisting the court as an amicus curiae, which indicated that eight percent of home buyers have sought a refund while 92 percent of them preferred possession of homes.
The amicus had also informed the bench that information indicated that an amount of Rs 1,300 crore was required to be refunded by way of principal alone to the home buyers who were seeking refunds.
It also noted the submissions of the counsel appearing for JAL and JIL that they have provided over 11,200 homes to home buyers in 79 towers in their project and the work should not be stopped midway since it would affect the interests of remaining 21,532 buyers, who await possession.
The top court also dealt with the issue related to claim of the home buyers, who want refund of their money, and said that though this deserves to be considered with "empathy", the same cannot be acceded to.
It said that during the pendency of corporate insolvency resolution proceedings (CIRP), it would be "impermissible" for the court to direct preferential payment being made to a particular class of financial creditors, whether secured or unsecured.
"Directing disbursement of the amount of Rs 750 crores (deposited by Jaypee in the court) to the home buyers who seek refund would be manifestly improper and cause injustice to the secured creditors since it would amount to a preferential disbursement to a class of creditors," it said.