In a recent development, the Allahabad High Court has taken a significant step in the ongoing case related to the cancellation of 1,000 hectares of land allocated to the Jaypee Group by the Yamuna Expressway Industrial Development Authority (YEIDA). The land in question includes the Buddh International Circuit, which recently hosted the three-day MotoGP event. The division bench, comprising Chief Justice Pritinker Diwaker and Justice Saumitra Dayal Singh, has directed banks that financed the Jaypee Group to provide clarity on their positions in this matter.
The Call for Clarity
The court had previously invited homebuyers and banks to submit applications if they wished to be involved in the case. On September 19, the bench noted that while several banks had filed their applications, they had not taken a definitive stance on whether to support Jai Prakash Associates (JAL), the petitioner, or not. In response to this ambiguity, the bench requested the financiers to articulate their legal positions clearly and to file affidavits anew.
Notably, the State Bank of India (SBI), a secured creditor of the petitioner, was permitted to file its application. SBI contended that it was a “necessary party” to the case due to its initiation of insolvency proceedings against JAL before the National Company Law Tribunal (NCLT) in Allahabad.
YEIDA’s counsel urged the banks to file their applications promptly to allow the Authority sufficient time to respond. The court subsequently approved the intervention applications submitted by the homebuyers.
JAL’s Perspective
Representatives of JAL argued in court that YEIDA should not have revoked the allocation of the entire 1,000 hectares of land, as a substantial portion of the land had already been developed. They asserted that the Authority should have only canceled the allotment for areas where no development had taken place, if necessary.
Upcoming Hearing
The Allahabad High Court has scheduled the next hearing for this matter on October 10, 2023.
Background
The dispute dates back to February 12, 2020, when YEIDA canceled the allocation of 1,000 hectares to JAL for the development of a Sports City under a special development zone (SDZ) scheme along the Yamuna Expressway. The disagreement primarily revolved around outstanding dues, with YEIDA claiming that JAL owed Rs 3,621 crore, while JAL argued that the amount was only Rs 1,483 crore.
Subsequently, JAL approached the high court, seeking interim relief and expressing its commitment to clear all outstanding dues. The developer also presented a resolution plan aimed at completing its residential projects within Sports City.
The Allahabad High Court’s recent move to seek clarity from the banks involved underscores the complexity and significance of this ongoing legal battle. As the case progresses, it will be of great interest to parties involved and observers alike.
Also read: Land Sale Proposal of Jai Prakash Associates Limited (JAL) Faces Objections from YEIDA