Jaypee Infratech insolvency case: Supreme Court sets 45-day deadline for resolution

Justice Shantanagoudar was elevated as a judge of the Supreme Court on February, 17, 2017.

The Supreme Court has directed the interim resolution professional of Jaypee Infratech to complete insolvency proceedings in 45 days, setting the ball rolling for completion of 20,000 pending flats in Uttar Pradesh's Noida and Greater Noida.

In a judgement delivered on March 24, the court said the Insolvency Resolution Professional (IRP) can invite modified or fresh resolution plans only from Suraksha Realty and state-run NBCC, the two applicants who were allowed to do so in the judgment on November 6, 2019.

“We direct the IRP to complete the CIRP (Corporate Insolvency Resolution Process) within the extended time of 45 days from today ... It is made clear that IRP shall not entertain any expression of interest by any other person nor shall be required to issue any new information memorandum,” the court said.

It said the resolution plans should be submitted in two weeks.

“The applicants shall be expected to proceed on the basis of the information memorandum already issued by the IRP and shall also take into account the facts noticed and findings referred in this judgment,” the court added.

After receiving the resolution plan, the IRP will take steps to complete the voting process of Committee of Creditors (CoC) and the report submission to the adjudicating authority within the extended period of 45 days.

The court said the adjudicating authority will take final decision, adding that the extension period was being granted due to the “exceptional circumstances of the case and shall not be treated as a precedent.”

The apex court said the Rs 750 crore deposited by Jaypee Associates would not go to Jaypee Infratech and that NBCC would not be allowed to utilise it for construction.

The Supreme Court had reserved its judgment on October 8, 2020 over a batch of petitions and appeals filed in the matter.

On August 6, 2020, the court had transferred to itself the appeals pending before the National Company Law Appellate Tribunal (NCLAT) against the NBCC plan to acquire debt-ridden Jaypee Infratech and construct over 20,000 pending flats. The top court had said then that all appeals before NCLAT and the apex court would be heard together to avoid further delay.

NBCC had challenged modifications made by the NCLT in the original resolution plan submitted by it and as approved by the Jaypee Infratech Ltd. (JIL)'s CoC.

On March 3, state-owned NBCC had received approval from the NCLT to acquire debt-laden Jaypee Infratech through an insolvency process and complete more than 20,000 pending flats over the next three and half years.

The tribunal had also ordered that Rs 750 crore be deposited by Jaypee Infratech's parent firm Jaiprakash Associates with the Supreme Court registry, would be part of the resolution plan.

Jaypee Infratech went into an insolvency process in August 2017 after the NCLT admitted an application by an IDBI Bank-led consortium. Anuj Jain was appointed as an IRP to conduct the insolvency process and manage the affairs of the company.

In December 2019, a CoC comprising 13 banks and around 21,000 homebuyers approved NBCC's resolution plan with 97.36 percent votes in favour. The proposal was approved by the lenders in the third round of bidding process to find a buyer for Jaypee Infratech.

In its bid, the NBCC had proposed to complete over 20,000 pending flats in housing projects launched by Jaypee Infratech in Noida and Greater Noida (Uttar Pradesh). Homebuyers' claim amounting to Rs 13,364 crore and lenders' claim worth Rs 9,783 crore were admitted.

In November 2019, the top court had directed completion of Jaypee Infratech's insolvency process within 90 days and the revised resolution plan to be invited only from the NBCC and Suraksha Realty.