The National Company Law Appellate Tribunal (NCLAT) on April 22 refused to stay the execution of the resolution plan submitted by NBCC to take over embattled firm Jaypee Infratech and complete 20,000 stuck housing units. It also allowed the interim resolution professional to proceed with constituting the interim monitoring committee for execution of the plan.
IRP Anuj Jain has been directed to constitute an interim monitoring committee, comprising representatives of the NBCC and its three main lenders - IDBI Bank, IIFCL and LIC.
"Meanwhile, till further orders, the approved resolution plan may be implemented subject to outcome of this appeal…The IRP may constitute an interim monitoring committee comprising the successful resolution applicant, i.e., the appellant and the three major institutional financial creditors, who were Members of the 'committee of creditors," NCLAT’s direction came over an urgent petition moved by the NBCC.
The appellate tribunal issued notices to ICICI Bank, IDBI Bank and others, directing them to file reply in two weeks and listed the matter for next hearing on May 15 .
A five-member interim monitoring committee has been constituted to oversee the implementation of the resolution plan and ensure that the transition plan gets underway.
Sources said that while no construction can begin immediately due to the COVID-19 situation, there will now at least be an interim arrangement in place to start the ball rolling.
“The process of transition can now begin. There will finally be some movement going forward. The interim monitoring committee may now decide to draw up a strategy for seeking approvals required under the resolution plan from various authorities, it may decide to renegotiate certain contracts and even revisit some of the timelines,” legal experts said.
The NCLAT order said that “the implementation of the ‘Successful Resolution Plan’ would involve participation of the ‘Successful Resolution Applicant’, i.e. NBCC (India) Ltd. as also the three major Institutional Financial Creditors, who are Members of the ‘Committee of Creditors’ i.e., IDBI Bank Ltd., IIFCL and LIC,” the order said.
“Meanwhile, till further orders, the approved ‘Resolution Plan’ may be implemented subject to outcome of this Appeal. The Interim Resolution Professional may constitute ‘Interim Monitoring Committee’ comprising of the ‘Successful Resolution Applicant’, i.e., the Appellant and the three major Institutional Financial Creditors, who were Members of the ‘Committee of Creditors’ as named above,” it said.
As per the Resolution Plan submitted by NBCC in December 2019: "On and from the approval date, the Company (Jaypee Infratech) will be managed and controlled by the Monitoring Agency/any other person appointed by the NBCC in consultation with the Steering Committee comprising of representatives of three Institutional Financial Creditors having the largest voting share in the admitted financial debt, on the basis of a letter of appointment/agreement.”
On March 3, NCLT had approved NBCC's bid to acquire JIL through an insolvency process. NCLT had also ordered that the Rs 750 crore deposited by Jaypee Infratech's parent firm Jaiprakash Associates Ltd (JAL) with the registry of the Supreme Court would be part of the resolution plan.
The same month, NBCC had moved the National Company Law Appellate Tribunal (NCLAT) seeking reliefs on certain conditions related to farmers' compensation for land acquisition in Noida and Greater Noida in Uttar Pradesh. It had also sought relief on payments to be made to some dissenting financial creditors like ICICI Bank.
In its resolution plan, NBCC had proposed to complete over 20,000 pending flats in the next three-and-a-half years.
NBCC had offered 1,526 acres of land to lenders under a land-debt swap deal. Apart from this, the state-owned firm has proposed to transfer the road asset to lenders.
More than 10,000 homebuyers and major lenders of Jaypee Infratech, including IDBI Bank and State Bank of India, had voted in favour of the resolution plan submitted by the government's construction arm NBCC to acquire the embattled real estate firm.
NBCC has proposed to complete over 20,000 pending flats in the next three-and-a-half years. In its bid in December, NBCC had offered 1,526 acres of land to lenders under a land-debt swap deal. On Yamuna Expressway, NBCC has proposed to transfer the road asset to lenders but before that it would take a loan of around Rs 2,500 crore against toll revenue to fund construction spend.
The December round of voting was the third round of bidding process to find a buyer for Jaypee Infratech, which went into Corporate Insolvency Resolution Process (CIRP) in August 2017.
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