Hearing a plea by IDBI Bank, seeking a stay or annulment of the voting process, a three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya also allowed nine homebuyers' associations representing around 5,000 buyers to file intervention application.
The National Company Law Appellate Tribunal (NCLAT) Friday annulled voting by homebuyers and lenders on NBCC’s bid to acquire debt-laden Jaypee Infratech, and allowed renegotiation on the offer by May 30. Hearing a plea by IDBI Bank, seeking a stay or annulment of the voting process, a three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya also allowed nine homebuyers’ associations representing around 5,000 buyers to file intervention application.
The appellate tribunal also allowed the Committee of Creditors (CoC) to renegotiate on NBCC’s bid by May 30. Fresh voting process will start from May 31, the bench said. On Thursday, voting started to approve or reject NBCC’s bid to acquire Jaypee group’s realty firm. As many as 13 banks and over 23,000 homebuyers of Jaypee Infratech have voting rights in the CoC.
The voting process was to end on Sunday and the result was to be announced on May 20. In its order on Friday, the bench said, “in the meantime, the voting already taken is annulled.” IDBI Bank, the biggest lender to the debt-laden realty firm, had opposed NBCC’s bid saying it was conditional. It said NBCC’s offer for the company was conditional upon grant of approval to transfer Yamuna Expressway’s business.
The bench further said,”the CoC, if required, may renegotiate with NBCC by May 30, 2019 and will start fresh voting since May 31, 2019 and onwards.” The appellate tribunal left it to the CoC to approve the resolution plan of NBCC “if it is in accordance with law.” However, the bench said,”in case the CoC is not inclined to accept the plan they will not pass any order of rejection without prior permission of this Appellate Tribunal as the matter relating to their voting share and other financial creditors is pending consideration.”
While allowing intervention application of homebuyers, the bench said their representative can take legal assistance considering the fact that the allottees have no expertise in the legal field. “Such legal professional is allowed to attend meeting of CoC to assist the representative but will not cast any vote nor express any opinion in the meeting,” the order added.
Jaypee Infratech went into insolvency process in 2017 after the National Company Law Tribunal (NCLT) admitted an application by IDBI Bank-led consortium seeking resolution of the realty firm. In the first round of insolvency proceedings, a Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders.
Later on in October 2018, interim resolution professional (IRP) Anuj Jain started a second round of bidding process to revive Jaypee Infratech on the direction of NCLT. Earlier this month, creditors, including banks and homebuyers, rejected a bid of Mumbai-based Suraksha Realty through a voting process, following which the CoC decided to consider NBCC’s offer.
In its revised offer, NBCC proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore as well as Yamuna Expressway to banks and completion of flats construction by July 2023 in order to settle an outstanding claim of Rs 23,723 crore of financial creditors.
Earlier this week, the CoC decided to put on vote the revised offer of NBCC, with homebuyers favouring the voting process while bankers dissenting. Lenders had written to NBCC seeking clarifications on certain relief and concessions put forward by the public sector firm in its resolution plan. However, NBCC decided not to dilute the conditions of exemption from income tax liability as well as from taking consent of development authorities for transfer of businesses.
Clarifications from the NBCC were sought in the wake of the IRP flagging to the lenders that NBCC’s bid was conditional and non-binding. Jain, the IRP, had written to the CoC that NBCC’s revised bid was conditional as the plan would not be binding unless key relief measures such as extinguishing of income tax liability and exemption from seeking consent of YEIDA (Yamuna Expressway Industrial Development Authority) for any business transfer, were taken.