The National Company Law Appellate Tribunal (NCLAT) has refused to stay an NCLT order admitting infrastructure firm Jaiprakash Associates Limited into insolvency resolution process.
The NCLAT said on June 10 that the Interim Resolution Professional submitted that neither the company’s 25,000 employees nor ongoing projects would be affected, as IRP intended to run the company as a going concern.
Sunil Kumar Sharma, a suspended company director, sought the stay.
The NCLAT has directed banks to respond to the appeal and asked them to consider the company’s one-time settlement offer. The case will now be heard on June 24.
Senior advocate Sandeep Sethi, who appeared for Sharma, told the court that the order of insolvency had put many infrastructure projects, in India and abroad, in jeopardy. The company had offered an OTS plan but the NCLT admitted the company to insolvency resolution process before a decision could be reached.
The company had already deposited Rs 200 crore of the outstanding Rs 1200 crore it owed to ICICI Bank, he said. The OTS would have worked itself out in four and a half months if the NCLT had not passed the insolvency order.
Senior advocate Sanjib Sen, who appeared for ICICI Bank, said it was not a straight-forward case as was being made out and the NCLAT should not stay the insolvency process.
The company owed more than Rs 30,000 crore to various banks and Rs 1,200 crore to ICICI, Sen said. It would set a wrong example if the proceedings were stayed.
The case has been pending in courts for a decade and Jaiprakash Associates tried to defer the insolvency proceedings by seven years on one pretext or the other.
A vacation bench of NCLAT, while refusing to stay the order of the NCLT’s Allahabad bench, said it would pass a detailed order giving instructions to the lenders.
Jaiprakash Associates has a debt of Rs 29,361 crore, including interest. In all, 22 lenders have exposure to JP Associates' debt.
The company has been trying to sell its cement plants to trim the debt but media reports have said the fate of the deal with Dalmia Cement remains uncertain.
Jaiprakash Associates and Dalmia Bharat in December 2022 signed a framework for the acquisition of JAL's cement, clinker and power plants for an enterprise value of Rs 5,666 crore.
The National Asset Reconstruction Company of India (NARCL) in March-April submitted an Rs 10,000-crore binding offer to acquire JAL's debt but the lenders sought a better offer, reports said.
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