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NCLAT annuls e-voting on NBCC's resolution plan

Directs lenders to conduct fresh voting from May 31.

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The National Company Law Appellate Tribunal (NCLAT) on May 17 annulled voting by the committee of creditors on the resolution plan submitted by NBCC to acquire embattled Jaypee Infratech.

NCLAT was hearing a plea by IDBI Bank. The bank had sought a stay or an annulment of the ongoing e-voting process. The three-member bench of the NCLAT headed by Chairman Justice SJ Mukhopadhaya has now asked the lenders to conduct fresh voting from May 31.

"The Committee of Creditors, if required, may renegotiate with the NBCC by 30th May, 2019 and will start fresh voting since 31sr May, 2019 and onwards," the order said.


The bank has been opposed to the NBCC's bid saying it was conditional.

In its revised offer, NBCC had proposed infusion of Rs 200 crore equity capital, transfer of 950 acres of land worth Rs 5,000 crore to banks and completing construction of flats by July 2023 to settle an outstanding claim of Rs 23,723 crore of financial creditors.

But it had put several conditions for the implementation of its plan, including a demand to extinguish an estimated income-tax liability of Rs 33,000 crore over a period of 30 years arising out of the transfer of land parcels from Yamuna Expressway Industrial Development Authority (YEIDA) to Jaypee Group.

Homebuyers and lenders of embattled firm Jaypee Infratech on Thursday had started e-voting on NBCC's bid to acquire the firm and complete the construction of over 20,000 flats.

The voting process, which started at noon on May 16, was to end on May 19 and the results were scheduled to be declared on May 20.

As many as 13 banks represent 40.71 percent voting rights in the Committee of Creditors (CoC) while over 23,000 homebuyers have around 59 percent vote.

Justice Mukhopadhaya said the CoC (committee of creditors) may approve the plan if it is in accordance with law, but in case of rejection they cannot pass it until the NCLAT approves the rejection of the bid.

"In case the Committee of Creditors are not inclined to accept the plan they will not pass any order of rejection without prior permission of this Appellate Tribunal as the matter relating to their voting share and other financial creditors is pending consideration," the order said.

The NCLAT also allowed nine homebuyers' associations representing to file intervention application.
First Published on May 17, 2019 02:28 pm