Money given by banks is also public money and can't be given less priority, says IDBI Bank

IDBI Bank, in its application filed today in the Supreme Court against the stay on insolvency resolution proceedings, said that the money given by banks and financial creditors to Jaypee Infratech are also public money and cannot be given any less priority in comparison to any other creditor. IDBI Bank on Tuesday had moved the apex court demanding the stay order to be vacated. A three-member bench headed by Chief Justice Dipak Misra on Tuesday asked IDBI Bank to file an application and scheduled the hearing in the matter for September 11. "The possibility of resolution clearly outweighs the rights of any individual stake holder as compared to the benefit of all stake holders," the bank said in its application filed by law firm Cyril Amarchand Mangaldas. The Supreme Court on September 4 had stayed insolvency resolution proceedings against Jaypee Infratech till further orders on a plea by home buyers of its projects in Noida, restoring the developer’s original board of directors and ordering resumption of all consumer cases filed against the company and its promoters. According to the bank, the stay order does not benefit any of the stakeholders, including home buyers. "It derails the whole process of insolvency resolution which could otherwise resulted in a resolution for all stake holders including home buyers," it said. The bank also stated its fears that handing bank the management of affairs to Jaypee promoters will give rise to risk of dissipation of assets and many prejudice all stakeholders. The home buyers in their plea also urged the apex court to declare them as ‘secured creditors’ so that they could be among the first claimants to proceeds from the sale of the company’s assets in case of insolvency. The next date of hearing has been set for October 10.