Crisis-ridden Jaiprakash Associates Ltd (JAL) has decided to appeal against the NCLT order that directed the company to return nearly 760 acre land to its subsidiary Jaypee Infratech, while declaring the transfer of the land as “fraudulent” and “undervalued”. The order came over a petition filed by Jaypee Infratech’s resolution professional (RP) Anuj Jain in the the National Company Law Tribunal (NCLT) seeking direction over the transactions entered by the company’s promoters, creating mortgage on its 858 acre to secure debt for JAL. In a regulatory filing, JAL said that the entire transaction was done at the behest of the banks in normal course of business.
“…providing collateral security on unencumbered asset at fair market price was acceptable practice, therefore as an obedient borrower company has co-operated with the banks,” the company said, adding that it is filing an appeal against the NCLT order. As per the order, NCLT has directed JAL to return only 759 acre out of total 858 acre as it found that the transaction related to 100 acre in Aligarh district was entered before the start period of corporate insolvency resolution process (CIRP).
According to sources, this order will increase the total asset value of Jaypee Infratech as the 759 acre of land will be worth around Rs 1,500 to Rs 2,000 crore at the current market value. Meanwhile, the Supreme Court had on May 16 directed JAL to deposit an additional Rs 1,000 crore with its Registry by June 15 to provide refunds to the hassled home buyers.
On submission of this amount, the liquidation proceedings against Jaypee Infratech, will remain stayed, the apex court had said. Last year, the NCLT had admitted the application by an IDBI Bank-led consortium, seeking resolution for Jaypee Infratech under the Insolvency and Bankruptcy Code. The tribunal had appointed Jain as Interim Resolution Professional (IRP) to mange the company’s business.