The Supreme Court on Friday restrained the committee of creditors of Jaypee Infratech (JIL) from inviting fresh bids for the debt-laden real estate firm for two weeks.
A bench led by Justice AM Khanwilkar asked parties to maintain status quo for two weeks after the government counsel told it that the proposed amendments to the Insolvency and Bankruptcy Code that will protect homebuyers interest are already underway and will soon be notified as Parliament has already passed the Bill.
“We have not seen the amendment, let it come… Why are you in hurry,” the bench said, adding that allowing the process of inviting bids to go on would be “prejudging the amendment” and the whole exercise will become “futile”.
Homebuyers led by senior counsel Ajit Sinha and Bishwajit Dubey, representing IDBI Bank, opposed grant of any status quo order, saying it will delay the whole process. “Two years have already lapsed. National Company Law Appellate Tribunal (NCLAT) has also granted 90 days for the process which should not be stalled… Besides, the draft amendments are restricted to voting rights only,” Dubey argued.
Meanwhile, the apex court also sought response from the lenders, resolution professional, homebuyers and others on an appeal by Jaiprakash Associates, the parent company of JIL, challenging the NCLAT’s order that allowed fresh bidding for the embattled firm and also barred promoters from participating in the fresh auction.
JAL and Manoj Gaur, the CMD of the suspended management of JIL, in their joint appeal told the apex court that the NCLAT exceeded its jurisdiction and disregarded the strict and mandatory provisions of the IBC by giving another opportunity to the other resolution applicants, including state-owned NBCC and Adani, to resubmit their resolution plans, even though the same have repeatedly been rejected.
It said that the SC had once permitted JAL to present its proposal before the CoC of JIL, but the same was merely rejected as a statutory bar stipulated under the IBC.
JAL had earlier submitted its bid to regain control over its subsidiary and had offered to pay the 100% outstanding amount to creditors without any haircut. It had also offered to complete the unfinished flats within three years.
To enable the fresh bidding process, the NCLAT had also extended the corporate insolvency resolution process (CIRP) of JIL for another 90 days, which includes a 45-day window for the resolution professional and lenders of the debt-ridden firm to invite fresh bids.
IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around Rs 24,000 crore. The NCLT, Ahallabad, had admitted the IDBI Bank-led consortium’ plea.
In the first round of insolvency proceedings conducted last year, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders. In October 2018, the RP had started second round of bidding. While state-owned NBCC’s plan to complete the pending projects was rejected by the lenders, the Adani group is also now in the fray with its unsolicited bid.
