The national company law appellate tribunal (NCLAT) has dismissed a plea by Jaypee Infratech Ltd (JIL) seeking Rs15 crore in interest on funds deposited by its parent company, Jaiprakash Associates Ltd (JAL), during JIL’s insolvency process. The appellate tribunal ruled that JIL was not entitled to claim interest on the Rs546 crore released to it from the Rs750 crore originally deposited by JAL under the Supreme Court (SC)’s directions in 2017 to safeguard home-buyers’ interests.
Delivering its judgement on 4 November 2025, NCLAT’s principal bench in New Delhi, led by chairperson justice Ashok Bhushan and technical member Barun Mitra, held that the interim and final orders in the long-running case did not grant JIL any right to claim interest on the funds. “The applicant having already received the entire amount as determined by the NCLT and NCLAT out of the Rs750 crore, no further directions are required. IA No.3175 of 2025 is accordingly dismissed,” the bench said.
The tribunal emphasised that the Rs750 crore deposit, along with the interest accrued thereon, remains the asset of JAL which had deposited the money in compliance with the SC’s interim order in Chitra Sharma & Ors vs Union of India (2017). The funds were meant to benefit thousands of home-buyers affected by the financial collapse of JIL, a subsidiary of the Jaypee Group, following the initiation of its corporate insolvency resolution process (CIRP) in August 2017.
The dispute dates back to August 2017 when IDBI Bank initiated insolvency proceedings against JIL before the national company law tribunal (NCLT). During this time, the SC had directed JAL, the parent company, to deposit Rs2,000 crore in its registry to protect homebuyers’ interests. JAL deposited Rs750 crore which was later transferred to NCLT along with accrued interest for allocation in accordance with judicial directions.
In March 2023, the NCLT at Allahabad decided on applications filed by both JIL and JAL over the appropriation of the Rs750 crore deposit. The tribunal allowed the distribution of funds between the two companies, with JIL receiving Rs265.21 crore and additional sums amounting to about Rs546 crore in total. However, it rejected JIL’s claim for proportionate interest, ruling that the deposit and all interest accrued belonged to JAL.
JIL challenged the NCLT order before NCLAT, while JAL also filed a parallel appeal over certain related issues. In August 2023, NCLAT upheld the NCLT’s decision, confirming that the Rs750 crore and all interest earned were JAL’s property. The tribunal, however, allowed JIL to receive its allocated share as determined by the lower court but expressly denied any entitlement to interest.
In its fresh application, JIL argued that it was entitled to Rs15.15 crore in interest for the period between March 2023 and February 2024 on the amounts it received, Rs265.21 crore and Rs277.41 crore, from the NCLT’s registry. The company contended that since the release of funds was delayed, the interest accrued during this period on fixed deposits held by NCLT should be transferred to JIL.
JIL maintained that its claim did not rely on any private settlement with JAL, but was based on its entitlement arising from the tribunal’s interim order of 16 March 2023 and final judgment of 28 August 2023. “The interest earned on this amount by the registrar is the undisputed property of the applicant,” the company says in its filing.
However, NCLAT rejected this argument, holding that neither the interim order nor the final judgement had set any time limit for the disbursal of funds or directed payment of interest. “This tribunal did not fix any time limit for payment of the said amount, nor directed for payment of any interest on the said amount from any particular date,” justice Bhushan observed.
The tribunal noted that procedural requirements, such as indemnity undertakings and verification by the NCLT registry, caused the delay in release of funds and did not create any liability for interest. The bench added that since the entire amount had already been released to both JIL and JAL as per their respective entitlements, there was no scope for further monetary relief.
Jaiprakash Associates argued that the Rs750 crore was deposited by it under SC orders and, therefore, any interest accrued on it rightfully belonged to the company. It pointed out that both NCLT and NCLAT had consistently affirmed this position in their earlier orders.
NCLAT agreed with JAL’s contention, reiterating that its own 2023 ruling had already clarified that the Rs750 crore and its accrued interest constituted JAL’s asset. The appellate bench emphasised that JIL had already received its full entitlement as determined by the earlier judgments, and no further claim could be sustained. “When there is no direction for payment of any interest in the orders dated 16 March 2023 and 28 August 2023, nor any period for payment having been fixed, we are not persuaded to accept the submission that JIL was entitled to payment along with accrued interest,” the bench stated.
With the dismissal of this application, NCLAT has effectively closed another chapter in the long-running Jaypee group insolvency saga. The case has seen multiple rounds of litigation before NCLT, NCLAT, and the Supreme Court, with key rulings shaping how funds are treated when deposited by parent companies for the benefit of their insolvent subsidiaries.
