SC transfers all NCLAT cases of Jaypee to itself to cut delays

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August 7, 2020 5:45 AM

After hearing all the parties, the apex court transferred all the appeals pending in the NCLAT, including the one filed by NBCC against the NCLT’s March decision that also ordered that the Rs 750 crore deposited by JIL’s parent firm Jaiprakash Associates with the SC registry would be part of the resolution plan.

After hearing all the parties, the apex court transferred all the appeals pending in the NCLAT.

The Supreme Court on Thursday transferred to itself all the appeals pending before the National Company Law Appellate Tribunal (NCLAT) related to debt-strapped Jaypee Infratech (JIL). The SC direction came to ensure that there is no further delay in execution of the the state-owned NBCC’s approved resolution plan and the 20,000 Jaypee homebuyers get their flats.

No construction work has taken place in the last 5-6 months as NBCC is aggrieved with the “unilateral modifications” made in its resolution plan for JIL approved by the National Company Law Tribunal (NCLT) in March.

While NBCC had offered land and road assets to lenders under a land-debt swap deal, NCLT, while approving its resolution plan, made “unilateral” and “arbitrary modifications” by allowing objections of dissenting creditor ICICI Bank and Yamuna Expressway Industrial Development Authority even as the plan was approved by a majority of 97.36% vote by the committee of creditors (CoC).

NCLT had asked NBCC to pay ICICI Bank its due in cash in 12 equal monthly instalments within 18 months, starting from six months from the approval of the resolution plan. Senior counsel UK Chaudhary, appearing for NBCC, told an SC Bench led by Justice AM Khanwilkar that “the unilateral and arbitrary changes have disrupted the financial arrangement envisaged in the scheme”.

The Bench agreed with Chaudhary’s argument, saying: “NBCC cannot be forced to execute the RP in these situations. If it goes ahead with the construction, there is no return for it.”

Seeking immediate implementation of the NBCC’s resolution plan, senior counsel Jaideep Gupta and Gopal Sankaranarayanan, appearing for the homebuyer associations, said the unnecessary delay defeats the entire purpose of the Code that provides for a time-bound CIRP. IDBI Bank counsel Bishwajit Dubey supported them, saying that three years had already elapsed.

After hearing all the parties, the apex court transferred all the appeals pending in the NCLAT, including the one filed by NBCC against the NCLT’s March decision that also ordered that the Rs 750 crore deposited by JIL’s parent firm Jaiprakash Associates with the SC registry would be part of the resolution plan.

Asking IRP Anuj Jain to continue to manage the affairs, the SC posted the matter for further hearing on August 31.
Thursday’s order came on an appeal by Jaypee homebuyers who through their associations have challenged the NCLAT’s April order that gave a conditional nod to NBCC to implement its proposal to acquire debt-ridden Jaypee Infratech and complete the stalled flats. NCLAT, in its interim order, had asked NBCC to implement its plan but said the direction will be subject to its final order.

NCLAT had erroneously directed the IRP to constitute the interim monitoring committee despite there being no provision for the same in the Insolvency and Bankruptcy Code 2016, according to homebuyers. An IDBI Bank-led consortium had initiated insolvency proceedings against JIL for failing to repay debt of around Rs 24,000 crore.

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