Flats not delivered on time, years of litigation: Jaypee homebuyers remain stuck in limbo

“… My daughter was young then, and I thought I would make a beautiful room for her… Ek Maa hoon, isliye Maa ke jaisa hi sochti hoon… Now, she is studying engineering… Beti chhoti se badi ho gayi, lekin ghar ka koi nishan nahi,” she added.

Over these past few years, Rashmi and 17,500 other homebuyers across 19 projects of Jaypee Infratech Limited (JIL), abutting the Yamuna Expressway, have been caught in a vicious cycle of litigation after insolvency proceedings were initiated against the firm in 2017 when it failed to deliver flats and defaulted on loans. The sheer number of aggrieved people makes it among the biggest cases undergoing resolution under the Insolvency and Bankruptcy Code (IBC), 2016.

While these projects are spread across two districts of Uttar Pradesh, over 90% of the buyers are in Noida alone. At Jaypee Greens Wish Town in Noida, being developed on approximately 1,063 acres, all its 16 projects, with around 250 towers, are in limbo.

Jaypee’s Wish Town project along the Noida Expressway. (Express Photo by Abhinav Saha)

On March 7 last year, buyers were hopeful after the National Company Law Tribunal (NCLT) approved a resolution plan that involved a Mumbai-based real estate company, Suraksha Realty Limited, replacing JIL and completing the flats in a time-bound manner. But almost a year since the order, construction is yet to begin.

Waiting game

‘A new and exciting place to live, work, play… developed on the concept of translating wishes into reality’: On the Jaypee Greens website, these catchy lines, with photos of swanky condos with a lake and a golf course to boot flashing in the background, conjure up visions of a dream home.

For Indu Mehrotra (77), who retired from IIT-Roorkee as a professor, skeletons of buildings are all she can see. Around 11 years ago, she had booked a 4-bedroom flat in Garden Isles, a Y-shaped high-rise tower, in Noida’s Sector 133 in Wish Town.

Her inspiration was none other than Jaiprakash Gaur, founder of the Jaypee group. An alumnus of IIT-Roorkee, Gaur was Chairman of the Board of Governors of IIT-Roorkee from May 2005 to February 2009.

“I was impressed by his lectures and working style. Jaypee was everywhere, be it roads, expressways, hotels, or high-rises. It was not just me, my colleagues in IIT too had bought flats. There was not an iota of doubt back then that something like this could happen. Lekin ye Wish Town Hindi ka Vish ban gaya hai,” said Mehrotra, whose housing society sold the flats with a rather ironic motto, ‘Life surely can’t get better than this!’

“I worked for around 40 years… and bought the flat when I retired. The idea was to finally live together with my family in one place. But it turned out to be a complete disaster… my son now lives elsewhere. I paid around 90% of the money (around 90 lakh)… we put all our savings and retirement benefits into this… I don’t know if I will get this flat in my lifetime,” said Mehrotra, who hails from Kanpur and currently lives with her husband in Noida’s Sector 150.

For Rashmi, who hails from Meerut, the burden of the loan forced her to take up part-time work to meet expenses. “I’ve paid around Rs 50 lakh (for the house) in different installments. Along with the EMI, I’m also paying Rs 34,000 rent every month to live in Greater Noida,” she said.

“I even tried to sell the flat when my father was undergoing dialysis for a kidney problem so I could cover the medical expenses. But there was no buyer. Why would someone buy a non-existent flat? The company said it has no money and the matter is stuck in court. We continue to be in a bad situation and the sad part is that I don’t see any way out,” she said.

Beginning of the end

The story starts with a concession agreement signed between Jaiprakash Associates Limited (JAL) and Yamuna Expressway Industrial Development Authority (YEIDA) on February 7, 2003. As part of this, JAL was to build the ambitious six-lane, 165-km-long Yamuna Expressway from Greater Noida to Agra and develop five integrated townships alongside. On April 5, 2007, JIL, a company of Jaypee Group, was incorporated as a special purpose vehicle (SPV) to implement the concession.

As per the deal, in lieu of construction of the Expressway, YEIDA gave the company approximately 6,177 acres of land (25 million sqm) that it acquired from farmers at five different locations abutting the expressway — Gautam Buddha Nagar (Noida, Jaganpur and Mirzapur), Tappal in Aligarh, and Agra — on a 90-year lease.

The company was required to develop these land parcels for residential, commercial, amusement, industrial, and institutional purposes. However, of these five land parcels, the company could initiate development on only three — Noida, Mirzapur, and Agra.

Soon, Jaypee found it had too many projects — the expressway and multiple high-rises — on its plate. So, it took loans from banks and financing institutions to complete them.

Ashish Mohan Gupta, president of the JIL Real Estate Allottees Welfare Society, an organisation fighting for Jaypee home buyers, described the popularity of the group in its initial days: “At one time, the situation was such that if a person called Jaypee’s office or a broker and said they wanted a flat on the fifth floor, the broker would say there is one on the 10th floor and if you do not say yes to it within 10 minutes, it will be sold. Such was the faith in the company at that time.”

“JIL also offered flats at cheaper rates. At that time, bookings in Aman society were being done at the rate of Rs 2,000 per sqft. The result was that around 6,000 people made bookings for just 3,000 flats. To accommodate all buyers, Jaypee quickly started more projects,” he added.

“The problem began when they started diverting homebuyers’ money to build the expressway — around Rs 3,500 crore was diverted… It should have been used in developing housing infrastructure… there was a cash crunch and the company went bankrupt,” he claimed.

A resolution

When JIL defaulted on loans, IDBI Bank filed a petition in the NCLT to initiate the Corporate Insolvency Resolution Process (CIRP) against the company under provisions of the IBC, 2016.

On August 9, 2017, the NCLT Allahabad bench appointed an Interim Resolution Professional (IRP), Anuj Jain, to complete the CIRP. The IRP set up a Committee of Creditors (CoC), which comprised home buyers too. The CoC was the final authority to decide on a Resolution Applicant (i.e. the company that will complete the remaining work in place of JIL).

Initially, NBCC (India) Ltd. won the bid. The NCLT approved its plan with ‘certain modifications’. NBCC challenged the modifications in the National Company Law Appellate Tribunal (NCLAT). After more back-and-forth in the tribunal, a consortium of ‘Suraksha Realty’ and ‘Lakshdeep Investments and Finance Private Limited’ won the bid in 2021; its plan was approved by the NCLT in 2023.

But it did not end there. The Income Tax department, JAL and YEIDA challenged the order in the NCLAT citing that their dues have not been addressed in the resolution plan. The appellate tribunal admitted the appeal but did not stay the implementation of other aspects of the plan.

YEIDA had submitted its claim for Rs 6,111.59 crore, out of which Rs 1,689 crore was additional compensation for farmers. Suraksha agreed to pay only Rs 20 lakh (Rs 10 lakh for farmer compensation and Rs 10 lakh for other claims) under its plan. After YEIDA filed an appeal in the NCLAT, Suraksha proposed an out-of-court settlement, including paying farmers’ compensation in installments.

In its board meeting, YEIDA discussed the proposal in terms of farmer’s compensation but said it needs to be paid in one go before the takeover by Suraksha. Sources said Suraksha has sought time from UP Chief Minister Yogi Adityanath to discuss the matter before it goes to the cabinet.

“Suraksha’s proposal has been sent to the Infrastructure and Industrial Development Department, Uttar Pradesh government, for further action. Since the concession agreement was approved by the Cabinet, the final decision in this regard can only be taken by it,” said YEIDA CEO Dr Arun Vir Singh.

Current status

While the next hearing of the case in the NCLAT is on February 23, the day-to-day affairs of the firm and projects are overseen by an Implementation and Monitoring Committee constituted on March 13, 2023. It comprises Aalok Dave, Managing Director of Suraksha; Anuj Jain, erstwhile IRP; and Kuldeep Verma, a representative of the homebuyers in the CoC.

As per the latest progress submitted by the IMC to the NCLT in January, construction is ongoing in 62 towers in four projects of Wish Town — Kosmos, Klassic, Kensington Boulevard, and Kensington Park Apartments and Heights — involving 6,067 home buyers. It further said a notice inviting tenders for four other projects was uploaded on Jaypee Infratech’s website; while two were scrapped, the other two are under evaluation.

As per the approved resolution plan, Suraksha Group will refund Rs 178 crore to 1,807 homebuyers of six projects that have not taken off. The company said the balance construction cost of the pending projects is Rs 6,404 crore (approx). Once it takes over the company, Suraksha will deliver homes in four years to all 17,542 homebuyers.

Dave and Jain did not respond to questions from The Indian Express.

For Gupta, however, the fact that no one was prosecuted rankles him: “What hurts is the sheer lawlessness and mockery of the system in the hands of a few powerful people… while we are stumbling from door to door.”