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Banks that have provided financial support to Jaiprakash Associates Ltd (JAL), the flagship firm of the beleaguered Jaypee Group, have submitted affidavits to the Allahabad High Court in support of JAL's writ petition. The petition requests the court to overturn a decision by the Yamuna Expressway Industrial Development Authority (YEIDA) to cancel the allocation of 1,000 hectares of land to the company. This land was designated as a special development zone (SDZ) for the creation of a Sports City in Sector 25. YEIDA rescinded the allocation on February 12, 2020, citing unpaid land dues amounting to Rs 3,621 crore.
The land in question includes the Buddh International Circuit, India's sole Formula One track, which recently hosted the country's MotoGP race. JAL contests the outstanding amount, claiming it to be Rs 1,483 crore. They initially approached the high court seeking interim relief and later expressed their willingness to settle all outstanding dues. Furthermore, they offered a resolution plan for the completion of residential projects associated with this land.
During proceedings, JAL's legal counsel informed a bench consisting of Chief Justice Pritinker Diwaker and Justice Saumitra Dayal Singh that most banks involved have filed affidavits in support of the company's petition. They urged the court to nullify YEIDA's order, which had canceled the land allocation.
It's essential to note that in September, the court had previously instructed the banks to clarify their positions in this ongoing legal dispute. JAL's legal counsel also contested the amount of land dues calculated by YEIDA. They argued that YEIDA was demanding interest on the principal sum even for the period following the cancellation of the allocation in February 2020. They claimed that demanding interest for this period was unjust, particularly in light of the court's existing status quo order.
JAL's legal team pointed out that YEIDA had been charging lease rent on the land parcel from the date of allocation rather than from when the lease deed was officially registered. Furthermore, they stated that YEIDA was imposing interest on additional compensation, despite not paying the same to the farmers affected.
JAL further contended that YEIDA was imposing an extra 1-3% penal interest, which contradicted the terms of the allocation. The legal team referred to a recent report authored by an expert committee appointed by the central government, chaired by former Niti Aayog CEO Amitabh Kant. This report recommended that builders should not be subjected to interest charges for 24 months during the Covid-19 pandemic.
In response, the YEIDA's legal counsel challenged JAL's submission. They argued that the developer's concerns about the quantum of dues needed to be formally recorded through an affidavit. The counsel clarified that even though interest on additional compensation was not paid to the farmers, YEIDA's reasons for imposing such interest had been documented in their note on the interim arrangement. YEIDA affirmed that they had the authority to impose additional penal interest if they approved a request for an extension to pay outstanding dues. They contended that JAL was exceeding the scope of their original pleadings, as the differences they highlighted were not part of their writ petition.
The court issued a directive for JAL to submit an affidavit within three days outlining the reasons for their disagreement with YEIDA's calculations. YEIDA was granted the opportunity to respond to this affidavit. The case is scheduled for its next hearing on October 16.
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