Jaypee homebuyers can sue Jaiprakash Associates after SC order

The Supreme Court has declined to stay the apex consumer commission's order, which held that homebuyers in Jaypee Infratech Ltd (JIL) can move the consumer forum against JIL's parent company, Jaiprakash Associates Ltd. (JAL), for compensation and possession of their respective flats. JIL is undergoing insolvency proceedings. The Life Insurance Corporation declared JIL as a non-performing account (NPA) on September 30, 2015, and other lenders declared it as an NPA on March 31, 2016. On August 9, 2017, the National Company Law Tribunal (NCLT) admitted an application filed by one of JIL's financial creditors, IDBI Bank Ltd., for initiating insolvency proceedings. A spokesperson for the JAL refused to comment on the SC order.
 
A bench comprising Justices A.M. Khanwilkar and Ajay Rastogi said, "All contentions available to the respondent (home buyers) in the complaint, including on the relief of possession and refund against JAL, will have to be adjudicated by the Commission on its own merits in accordance with law uninfluenced by the observations made in the impugned judgment."
 
JAL had moved the apex court challenging the National Consumer Disputes Redressal Commission (NCDRC) order. Last year, NCDRC had dismissed JAL's argument that the company is acting only as a marketing agent, construction and sale of apartments and plots, for JIL. Many home buyers had moved the NCDRC about compensation or a refund with compensation from JIL and JAL. The NCLT appointed an Interim Resolution Professional (IRP), while declaring a moratorium under the Insolvency and Bankruptcy Code. The top court observed that the consumer commission will examine all contentions available to both sides (home buyers and JAL) regarding the rights and obligations of the parties on the merits in accordance with law.
 
The apex consumer commission in its order noted that the home buyers cannot approach the consumer forums against JIL, at this stage, as it is under insolvency proceedings.
 
The court said: "The Commission, however, may give appropriate directions in the final judgement which obviously will be subject to the outcome of the proceedings before the NCLT insofar as JIL is concerned and also subject to the outcome of proceedings against JAL before the NCLT."

User

  Loading...
  Loading...

To continue


Please
Sign Up or Sign In
with

Email

We are listening!

Solve the equation and enter in the Captcha field.

Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
img
Debashis Basu
Founder