Besides, the NCLAT order defeats the entire purpose of the Code, which provides for a time-bound CIRP, they said, adding that the IMC has given a cover to NBCC to implement the RP for an indefinite amount of time.
Jaypee homebuyers on Wednesday moved the Supreme Court against the National Company Law Appellate Tribunal April order that gave conditional nod to state-owned-NBCC to implement its proposal to acquire debt ridden Jaypee Infratech and complete over 20,000 stalled flats. The NCLAT had asked NBCC to implement its plan, but said that the direction will be subject to its final order.
A Bench led by Justice AM Khanwilkar issued notice to NBCC, Jaypee Infratech’s Interim Resolution Professional Anuj Jain, IDBI Bank and others on a joint appeal filed by homebuyers seeking immediate implementation of the NBCC’s resolution plan which has been approved by the Committee of Creditors and the National Company Law Tribunal on March 3. The case will be next heard on August 6.
Homebuyers through their associations alleged that NCLAT had erroneously directed the IRP to constitute the Interim Monitoring Committee (IMC), despite there being no provision for the same in the Insolvency and Bankruptcy Code 2016.
The NCLAT failed to appreciate that Corporate Insolvency Resolution Process (CIRP) took more than two years to conclude and the NCLAT has now thrown a spanner in the works by creating an IMC, which is not contemplated in the scheme of the Code and which surpasses the commercial wisdom of CoC, the homebuyers said in their appeal. Besides, the NCLAT order defeats the entire purpose of the Code, which provides for a time-bound CIRP, they said, adding that the IMC has given a cover to NBCC to implement the RP for an indefinite amount of time.
Even setting up of an IMC was in direct contradiction with the basic purpose of the resolution, the petition stated, adding that such a committee was not only “illegally constituted” but had rendered the delivery schedule in the plan meaningless.
Senior counsel Jaideep Gupta, appearing for homebuyers, alleged that the NCLAT order is “without jurisdiction” and once the NCLT approves the RP, it becomes mandatory and binding on the NBCC and all the rights and liabilities of the successful resolution applicant are then governed by the resolution plan itself. The NCLAT order is also prejudicial to them as the non-implementation of the resolution plan has only prolonged their suffering (being delayed construction, delivery and possession of flats), the homebuyers stated.
IDBI Counsel Bishwajit Dubey also told the SC that NBCC should implement the plan.
While the NCLT had approved NBCC’s bid, the tribunal had also ordered that the Rs 750 crore deposited by Jaypee Infratech’’s parent firm Jaiprakash Associates Ltd (JAL) with the SC registry would be part of the resolution plan. NBCC had challenged these modifications made by the NCLT in the original resolution plan.
IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around Rs 24,000 crore.