In a recent development, Noida-based real estate firm Jai Prakash Associates Limited (JAL) has proposed selling 150 acres of land to raise ₹2,755 crore in order to settle its financial obligations with the Yamuna Expressway Industrial Development Authority (YEIDA). However, YEIDA has raised objections to the plan, citing that JAL has already mortgaged 80 acres of the land in banks, making it ineligible for sale.
During a hearing in the Allahabad High Court on May 25, JAL’s lawyer, Jayant Bhushan, argued that the company should be given more time to resolve the case, as it intends to clear encumbrances on the 150-acre land parcel, which is part of the “core area” of the sports city project along the expressway. YEIDA officials, however, pointed out that 80 acres of the designated land have already been pledged to banks, making it impossible for JAL to sell them to raise funds.
Arun Vir Singh, the CEO of YEIDA, confirmed that JAL’s proposal to free the land from encumbrances was presented to the court. Nevertheless, since a significant portion of the land has already been mortgaged, the court will now decide on the future course of action. The next hearing in the case is scheduled for July 13, and the developer has been granted additional time.
The conflict between JAL and YEIDA stems from the cancellation of JAL’s allotment of 1,000 hectares of land by YEIDA on December 21, 2019, due to the developer’s failure to pay financial dues amounting to ₹3,621 crore. JAL claims that the outstanding amount is ₹1,483 crore. The company’s proposal entails securing the dues against 61.41 acres of housing land, 81.75 acres of commercial land, and 5.21 acres of institutional land, totaling 150 acres in the “core area.” The estimated value of this land is ₹2,755 crore, exceeding the claimed dues by JAL.
According to JAL, if the court approves the proposal, the company plans to sell or sublease the land within a year and deposit the proceeds in an escrow account. YEIDA would then be able to withdraw up to ₹1,483 crore from the escrow account, while the remaining amount would remain deposited until the conclusion of the court proceedings. JAL’s spokesperson declined to comment on the matter.
JAL is known for its construction of the Buddh International Circuit (BIC), India’s first Formula One track, which was inaugurated in October 2011. The circuit hosted the Formula One Indian Grand Prix from 2011 to 2013, designed by renowned German architect and racetrack designer Hermann Tilke. However, the venue was excluded from the Formula One calendar in 2014. JAL also developed various other sports facilities on the plot, including a cricket stadium. The company’s infrastructure projects have been marred by controversies, leaving around 6,000 homebuyers and investors unable to take possession of their units for several years. Jaypee Infratech Limited, the infrastructure arm of the JAL group, has been undergoing corporate insolvency proceedings since 2017.