The National Company Law Appellate Tribunal (NCLAT) on July 22 reserved its order over exclusion of litigation period from the ongoing Corporate Insolvency Resolution Process (CIRP) of embattled firm Jaypee Infratech. It is expected to pronounce the order on July 29.
Lenders of the embattled firm have requested that the 250-day period from September 17, 2018, to June 4, 2019, be excluded from the stipulated period for Corporate Insolvency Resolution Process (CIRP), as the National Company Law Tribunal (NCLT) had used this time to decide on the issue of voting rights of homebuyers.
JAL is not in favour of this exclusion. The two-member bench headed by Chairman Justice SJ Mukhopadhaya asked Jaiprakash Associates Ltd (JAL), the promoter of Jaypee Infratech, to file written submissions over exclusion from the statutory timeframe of 270 days by July 24.
Legal experts said that if the CIRP process is not completed within the stipulated 270 days, then the company can go into liquidation as per IBC. Lenders have said that the period during which it was being decided as to who can vote and who cannot, that period be excluded from the CIRP process. This comes to about 250 days. If that period is excluded from the CIRP process, there would still be time left to invite new bidders to come in.
Under Section 12A of IBC, a corporate debtor whose company has gone into liquidation can also propose to take the company out of insolvency by offering to repay all the debts if 90 percent creditors agree to that plan.
Promoters of debt-ridden Jaypee Infratech proposed before the NCLAT that they will pay creditors the entire outstanding amount without any haircut and complete pending projects within three years.
During the NCLAT proceedings, JAL offered to pay the 100 per cent outstanding amount to the creditors without any haircut. It also offered to complete the construction of the remaining flats within three years and hand over to the original allottees.
On July 17, NCLAT made it clear that the resolution applicant will have to ensure that the interests of Jaypee homebuyers are protected at all costs and directed banks to submit the terms and conditions for fresh bidders in the resolution process of the embattled firm.
"Counsel appearing for lenders are allowed to file new terms and conditions in case fresh bidding takes place," the bench had said.
The NCLAT bench also asked the Adani Group to improve its bid and agree to the terms and conditions set by the appellate tribunal if it wanted to be part of the process, sources said.
The apex court had on August 9 last year ordered re-commencement of the resolution process against JIL and allowed the Reserve Bank of India to direct banks to initiate corporate insolvency resolution proceedings (CIRP) against Jaiprakash Associates Ltd (JAL), the holding company of JIL, under the Insolvency and Bankruptcy Code (IBC).
Jaypee Infratech went into insolvency process in 2017 after the NCLT admitted an application by an IDBI Bank-led consortium seeking resolution of the realty firm. In the first round of insolvency proceedings, the Rs 7,350-crore bid of Lakshdeep, part of Suraksha Group, was rejected by lenders. Later in October 2018, the Interim Resolution Professional (IRP) started the second round of bidding process to revive Jaypee Infratech on the direction of NCLT.
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