The Supreme Court on Monday stayed insolvency proceedings against real estate firm Jaypee Infratech after homebuyers told the bench they would lose all their money.

Petitioners asked the top court to protect the interests of more than 30,000 people, who invested money to book homes in 27 different projects of the debt-ridden realty firm. Their plea claimed that homebuyers, who are unsecured creditors, will get nothing out of the insolvency proceedings as dues of the financial institutions will be cleared first.

On August 10, the Allahabad bench of the National Company Law Tribunal had allowed the insolvency proceedings against Jaypee Infratech, after its financier IDBI filed a petition against the firm for defaulting on a Rs 526-crore loan.

Under the Insolvency and Bankruptcy Code of 2016, flat buyers do not fall under the category of secured creditors like banks. Therefore, they may get back their money only if something remains after the firm repays the secured and operational creditors.

The Public Interest Litigation filed in the case wants the Centre and others to be directed to ensure that the Insolvency and Bankruptcy Code does not “curtail the legal statutory and vested rights of flat owners/buyers as consumers”, as defined under the Consumer Protection Act.

On Monday, a bench of Chief Justice Dipak Misra and justices AM Khanwilkar and DY Chandrachud has sought a response from Jaypee Infratech, the Reserve Bank of India and others.