Govt willing to provide tax relief if state-owned firm takes over projects
The Supreme Court on Tuesday sought state-run NBCC’s response within two days on whether it wants to submit a revised plan for completing bankrupt Jaypee Infratech’s (JIL) unfinished projects.
The direction came after Additional Solicitor General Madhvi Divan made a suggestion to the Justice AM Khanwilkar-led Bench to seek response from the state-owned firm on submission of a fresh bid to take over the stalled projects before passing any order.
Divan also told the SC that the government will extend all necessary cooperation, including tax concessions to JIL, if NBCC was to take over the company. NBCC’s earlier plan was rejected by lenders on the ground that it was a conditional offer.
Meanwhile, Jaiprakash Associates, the parent company of JIL, and its promoter reiterated that they are the only ones who can deliver all the 27 projects in three years and also pay off banks’ debt with “no haircut”. Senior advocate FS Nariman and Anupam Lal Das, appearing for Jaypee, said the group had no objection if NBCC came up with a revised plan, but they should also be allowed to put forward a proposal.
Justice Khanwilkar, however, said it would first look at what NBCC had to offer and may then look at Jaypee’s proposal. He observed that JIL should ideally go into liquidation after the deadline for insolvency process lapsed in May, but said liquidation will not solve anyone’s problems.
The apex court, while posting the matter for further hearing on September 5, extended the status quo in the Jaypee Infratech insolvency case. Earlier on August 2, the SC had in effect restrained the CoC of JIL from inviting fresh bids for two weeks and had asked parties to maintain status quo.
The top court was hearing cross-appeals filed by the homebuyers of the bankrupt real estate firm and JAL and its promoters challenging the July order of the NCLAT that allowed fresh bidding for JIL and also barred promoters from participating in the fresh auction.
JAL and Manoj Gaur, the CMD of the suspended management of JIL, had challenged the NCLAT’s order that allowed fresh bidding for the firm and also barred promoters from participating in the fresh auction.
Wish Town Home Buyers Welfare Society, which claims to have over 1,100 homebuyers of various JIL projects, had suggested that the apex court should “do complete justice” by inviting the bids in the court itself so as to get rid of the complex and cumbersome process of rounds and rounds of litigations and proceedings before CoC, NCLT, and NCLAT.
It stated the appellate tribunal, without even considering and comparing all the proposals in the interest of homebuyers, had “erroneously” extended the corporate insolvency resolution period (CIRP) of JIL for another 90 days so as to invite fresh bids for the debt-laden firm. This order, according to the association, amounted to “usurping the powers of the NCLT, CoC and RP, especially when the statutory period for completion of CIRP as stipulated under IBC had expired” in May.
IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around `24,000 crore. NCLT’s Allahabad bench had admitted the IDBI Bank-led consortium’s plea.
In the first round of insolvency proceedings conducted last year, the `7,350-crore bid of Lakshadweep, part of Suraksha Group, was rejected by lenders. In October 2018, the RP had started second round of bidding. While the 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.